What is a Target Market?

A target market is an intended audience for a marketing campaign, product or service.

How Does a Target Market Work?

Let's assume Company XYZ manufactures orthopedic shoes. Clearly, the company's target market might be seniors, and thus the company might direct its marketing efforts to them. However, Company XYZ has another target market: the retailers to whom it wholesales its shoes. Company XYZ's marketing messages might differ wildly between the two markets. In its advertisements to the senior market, the company might emphasize comfort, style, durability and price. But to the retailer market, the company might emphasize profit margins, speed of delivery to the store, or sales incentives it might offer.

Why Does a Target Market Matter?

Knowing a target market's likes, dislikes and proclivities sits at the heart of any marketing plan. Note, however, that demographics aren't the only creators of target markets. Psychographics (i.e., similarities in how people think or perceive the world) also create target markets. Sending the wrong message to the wrong market, or misunderstanding the needs of the right market, can spell disaster for a company.

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Paul Tracy
Paul Tracy

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 3 million monthly readers.

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