How well do you know your buyers? Have you defined your target market and buyer audience?
If you don't have incredibly specific answers to these questions, you’re likely missing out on reaching and connecting with your ideal customer base.
What’s more, if your answer sounds like, “we target everyone” or “we cater to a wide range of people,” then you’re effectively targeting no one in particular. You can't be all things to all people.
In this article, you'll learn how to define and refine your target market and how to reach the audience segments that matter most to your business.
First, What is a Target Market?
A target market is a specific, defined segment of consumers that a company plans to serve with its products or services. Identifying your target market is an essential step in how you develop products and services, and market them correctly.
To cut through the noise, you need to create products, services, and marketing campaigns for a specific, well-defined group of people. Otherwise, you may create products that don’t meet a real need, or you’ll spend time and money on a product and then not know how to find an audience for it.
You need to carefully define who’s interested in what you have to offer and then develop something superior for that target market.
This target market can be segmented by consumer geographies, demographics, and psychographics.
Let's look at an example.
How McDonald’s Targeted Specific Markets Successfully
McDonald's is the most valuable fast food brand in the world, and it's a fantastic example of demographic target marketing. Although McDonald's has grown to target multiple markets and audiences, they've created dedicated products and marketing campaigns for each segment.
For example, one of their core target markets is young children. For this segment, they provide play areas, meals that include toys, and marketing campaigns featuring characters and brands that children recognize.
Target marketing and aggressive pricing have helped McDonald's consistently maintain the largest fast food market share in the United States. But everything is continually changing.
In recent years, McDonald's sales have been in decline, and they've had to react to changes in their target market.
Let's explore what happened.
In 2016, millennials surpassed Baby Boomers to become the largest generation in the U.S., and this generation cares more about healthy foods than previous generations.
In response to this change in their target market, McDonald's updated their products and services. Over the years, McDonald's has offered salads and other potentially healthier menu options, as well as more upscale coffee products.
What is a Target Audience?
The term "target audience" is narrower than "target market." It refers specifically to the group of consumers targeted by marketing messaging.
Advertising specialist Tom Duncan explains, a target audience is "a group that has significant potential to respond positively to a brand message." Your target audience may or may not be the end users of your product, but they are the people you plan to direct your marketing to.
To communicate effectively with your target audience, you need to understand who they are and what they tend to want out of products and services. And how to use that knowledge to connect with them.
“No matter what your product is, you are ultimately in the education business,” says Robert G. Allen. “Your customers need to be constantly educated about the many advantages of doing business with you, trained to use your products more effectively, and taught how to make never-ending improvement in their lives.”
Let's revisit the McDonald's example we looked at above.
How McDonald’s Identified Adults as the Happy Meal’s Target Audience
Although one of McDonald's key target markets is children, there's a big problem with this target market: Children don't have any purchasing power.
In other words, it's not the children who buy McDonald's products. It’s their parents.
So, when McDonald’s created the Happy Meal, they served children as the target market, but the audience was the adults who’d actually buy the meals.
This is clearly shown in the video advertisement below.
The ad highlights things that kids aren't interested in, but are important to parents, such as "no artificial colors, flavorings, or preservatives," and charitable donations.
Kids care more about the toys, but this gets only a scant mention near the end of the video.
When it comes to Happy Meals, children might be McDonald's target market, but they're clearly not the target audience.
The Key Differences Between Target Market and Target Audience
Target market and target audience are similar, overlapping terms. However, there are key differences between them, mostly related to the practical implications each has on your business.
Products or services are developed to meet the needs and desires of the target market. Packaging and pricing decisions are made to appeal to the target market. And sales processes are structured around the target markets' shopping preferences.
However, a target audience mostly impacts decisions related to marketing, as a smaller group within your broader target market. Target markets usually comprise end users of a product or service, whereas target audiences may or may not be.
Target Markets and Target Audiences Can Be The Same
Often the target audience for a marketing message is the same group identified as the target market.
For example, a yoga leggings brand may identify a target market of single women, age 24-34, who regularly frequent gyms, and have a demonstrated interest in yoga.
In this example, the target audience will be the same as this target market.
However, marketers can hone in further on the target audience. For example, marketers may decide to use Instagram advertising to reach a distinct section of the audience that uses social media for shopping decisions.
So now the target audience may be further defined as Instagram users, who follow accounts such as Yoga Girl and Yoga Inspiration, have recently purchased products online, live in Portland, Oregon, and value fair trade products.
In the next section, let's talk about why targeting is so crucial to success.
The Power of Targeting
Many people believe that casting a wide net is the best way to catch more fish.
But the most successful fishermen know what type of fish they plan to catch ahead of time. They make nets with this specific size of fish in mind. And they know exactly where to find these fish, and when to strategically deploy their nets to catch them.
This is why targeted advertisements are, on average, more effective than non-targeted ads.
Identifying clearly defined target markets and target audiences works like a magnifying glass that focuses the sun's rays.
"It's hard to target a message to a generic 35-year-old middle-class working mother of two," says Elizabeth Gardner. "It's much easier to target a message to Jennifer, who has two children under four, works as a paralegal, and is always looking for quick but healthy dinners, and ways to spend more time with her kids and less time on housework."
With a clearly defined target market, every detail of a product or service can be perfectly tailored to their needs and desires. This will result in incredibly satisfied customers and overwhelmingly positive feedback.
Plus, with a well-defined target audience, every detail of a marketing campaign can be perfectly tailored to appeal to their interests, emotions, and world views.
If you know how to create marketing messages that truly resonate with your target audience, you'll achieve higher conversion rates, and build a more powerful brand.
Because as real-life Mad Men inspiration Howard Gossage said, "Nobody reads ads. People read what interests them. Sometimes, it's an ad."
But that's not all. Targeting also enables marketers to use the massive amount of data available now to get better results from digital marketing. You only have to spend five minutes creating a Facebook ad to be awestruck by the targeting capabilities of today's digital marketing tools.
So how can you tap into this power?
How to Identify Your Target Market
Now that you understand exactly what target markets and target audiences are, let's look at how you can uncover the market segments you should be targeting.
Step 1: Identify the Key Benefit that Your Business Provides
Get this right and your ideal target market should reveal itself.
Start with the end result you want to create: satisfying customers needs and desires.
"Authentic marketing is not the art of selling what you make but knowing what to make," said marketer Philip Kotler. "It is the art of identifying and understanding customer needs and creating solutions that deliver satisfaction to the customers, profits to the producers and benefits for the stakeholders."
You need to be able to answer these questions very clearly:
- What problem do you solve?
- What needs do you meet?
- And what desire do you fulfill?
And instead of starting with features, define what outcomes you provide for your customers, such as, "We help people to lose weight and get fit, which helps to improve their feelings of confidence and empowerment. Plus, we help them do it in the comfort of their own homes where they won't feel self-conscious, using exercise equipment they can conveniently buy online."
A great example of a company selling the benefits of a product instead of the features is the first iPod advertisement.
The main feature of the iPod was that it could store 1GB of MP3 files.
But Apple didn't promote this feature. Instead, Apple created the well-known tagline and accompanying campaign, "1,000 songs in your pocket."
Once you've clearly identified the benefits of what you do, it should be easier to uncover who is most in need of your product or service.
In the Apple example, the target market includes early adopters of new technology, who have a large music collection, and who love listening to music on the move. From here, Apple could dig deeper into their target market by testing the product with smaller groups of people who fit within these basic parameters.
Step 2: Refine Your Target Market
By this point, you should have a basic understanding of who your product or service benefits. From here, you need to narrow down the market segment you plan to target. Remember to be as specific as possible.
First, define the demographics of your target market.
Demographics are simply a particular section of a population. You can segment your target market using demographics such as age, location, gender, marital or family status, occupation, income level, education level, etc.
Next, identify the psychographics of the people who stand to benefit the most from your product or service. Psychographics are consumers' psychological attributes, like attitudes, values, interests, lifestyle, and behavior, etc.
Often more important than demographics and psychographics are buyer behaviors. Demographics and psychographics without behaviors can give you a skewed understanding of who the people in your market really are and how they act.
Once you've done this, you should have clearly defined a buyer persona.
Step 3: Stay Objective
This is perhaps the most difficult part of the process.
It can be extremely difficult to avoid assumptions. What's more, many people unintentionally search for, recall, and interpret information in a way that confirms their pre-existing beliefs or hypotheses. This is called confirmation bias.
If you're not careful, this bias can totally derail any attempt you make to clearly define your target market and target audience, which could spell disaster for your business.
And this happens all the time.
In fact, according to CB Insights, 42% of startups fail not due to a lack of funding, but due to a lack of market need.
In other words, they fail because the entrepreneurs behind them are so blindly passionate about their product or service, they forget to validate whether or not there's a true need for it in the marketplace.
The other mistake businesses make is to conduct plenty of research, but no real testing. Research is prospective. Testing is proof.
It doesn't matter how many people tell you they would use your product or service. And it doesn't even matter how many people say they would buy your product or service.
It only matters how many people actually buy your product or service.
So don't ask people if they like your product or if they would buy it. Create an MVP (minimum viable product) and sell it to them there and then. That's a more comprehensive way to know if there's a real market need for your product or service.
Bottom line: Assume no target market cares about your business, brand, products, or services unless categorically proven otherwise.
Step 4: Evaluate Your Market Segments
Now that you have real insights into who you plan to sell to, you need to verify that this is a market worth serving.
Ask yourself these questions:
- Are there enough people in the target market to sustain our business?
- Does this market segment have the money to buy our product or service?
- Will they buy repeatedly, or will we have to constantly close new customers?
- Is there much competition for this market segment?
- If there isn't, why is that?
- If there is, what separates us from the competition? Why should customers buy from us?
- How accessible is this target market?
Once again, research can only take you so far. To conclusively answer these questions, you need to create real-life tests where you actually engage with your prospective target market.
How to Connect with Your Target Audience
Understanding your market is one thing, but building genuine connections with them takes dedicated effort and smart strategies. Once you've identified who you want to reach, the next challenge is figuring out how to engage them effectively.
Discover Where Your Customers Spend Time
Your audience isn't everywhere. They have their preferred hangout spots both online and offline, and habits to go along with those preferences. Some consumers prefer scrolling through Instagram, while others engage more on LinkedIn or TikTok. Some read industry blogs, while others listen to podcasts during their commute.
Understanding these preferences means you can meet your customers where they already are, rather than hoping they'll find you.
Build Content That Matters
Creating material that truly speaks to your audience requires understanding their challenges and interests. This goes beyond just talking about your products. You must endeavor to provide genuine value through helpful information, entertainment, or solutions to their problems.
Whether it's blog posts, videos, newsletters, or social media updates, your content should address what keeps your audience up at night or what they're excited about during the day.
Leverage Precision Advertising
Modern advertising platforms offer incredible precision when it comes to reaching specific groups. You can target people based on their location, age, interests, shopping habits, life events, and much more.
This precision ensures your marketing budget goes toward reaching people who are actually likely to be interested in what you offer, rather than casting a wide net and hoping for the best.
Partner with Trusted Voices
Sometimes the best way to reach your audience is through people they already trust and follow. Collaborating with content creators and industry experts who have built relationships with your ideal customers can provide authentic introductions to your brand.
These partnerships work because they tap into existing trust and credibility, making your brand feel like a natural recommendation rather than an intrusion.
Encourage Word-of-Mouth Sharing
Happy customers are often your best marketers. Creating programs that motivate satisfied customers to share your products with friends and family can be incredibly effective.
People trust recommendations from people they know, so incentivizing these organic referrals through discounts, rewards, or exclusive perks can help you reach new customers who are similar to your existing ones.
Use Strategic Social Media Tags
On platforms like Instagram and TikTok, hashtags can help you appear in front of people who are actively searching for content like yours. Research which tags your ideal customers are following or searching for, and incorporate them naturally into your posts.
This strategy helps you become discoverable to people who are already interested in your industry or product category.
Maintain Ongoing Relationships
Reaching your audience once isn't enough. You need to build consistent engagement through email lists, social media campaigns, and other strategies to ensure that your value stays top-of-mind.
Regular communication helps build brand loyalty and keeps customers coming back for future purchases.
Stop Casting a Wide Net
Clearly defined target markets and target audiences are vital to the long-term success of any business.
The scattergun approach can only take you so far, so work to understand who your business serves and why they should care. And remember that the only true way to know who you should target is by testing.
Once you've defined your target market, ensure that your products or services fulfill their needs or desires.
After identifying these groups, the real work begins: connecting with them through the right channels, with the right content, at the right time. Whether through social media, advertising, partnerships, or word-of-mouth programs, success comes from meeting your audience where they are and providing genuine value.
Remember, casting a wide net is a small business' death sentence. So get specific.
Target Market and Target Audience FAQ
What is the Difference Between a Target Market and a Target Audience?
While a target market and target audience can sometimes be used interchangeably, the two differ in several key ways. A target market is a larger defined segment of consumers that a company plans to serve with products or services. It’s a broad grouping of people that typically share general or more specific characteristics. A target audience is a smaller segment within a target market, often spun out for more specific marketing tactics that don’t reflect everyone you’re trying to reach as a company.
How Do You Identify a Target Market?
Identifying the right target market for your business involves identifying a problem and consumer need, and then seeing if the benefits you are hoping to provide solve those challenges and desires.
How Do You Evaluate Your Market Segment?
To understand whether the market you’ve identified is right for you, you should ask yourself whether your market size is large enough to sustain your business. Do consumers in this broader group have the finances to buy your product or service, and will they be likely to come back? You want to define how much competition exists in the market you want to address, and what differentiates you from that competition. Also, you want to dig into how accessible your market is, so that you can start testing in the first place.
How Do You Connect with Your Target Market?
To connect with the people in your target market and audience, you want to know who they are and where they are, and where they go to find products and services in your niche. Create content for them that serves their needs and provides real value in their preferred media forms. Connecting in a meaningful way also involves directing some of your marketing budget toward precision advertising tools and partnering with trusted voices who help you stand out. Most importantly, you want to stay consistent with your content and communication, and build relationships with your audiences.