A target market is a specific, defined segment of consumers that a company plans to serve with its products or services.
Identifying the target market is an essential step in the development of products, services, and the marketing efforts used to promote them.
Plus, a target market typically contains the end users of a product or service.
This is why famous consultant Peter F. Drucker said, “The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself.”
This is vital to understand.
To cut through the noise, you need to create products, services, and marketing campaigns for a specific, well-defined group of people.
Because if you don’t? At best, they’ll be bad products or services that don’t fully meet the needs and desires of your customers.
But more likely, no one will buy them.
As marketing author Philip Kotler once said, “There is only one winning strategy. It is to carefully define the target market and direct a superior offering to that target market.”
This target market can be segmented by things like geography, demographics, and psychographic.
Let’s look at an example.
Target Market Example
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, happy meals complete with toys, and marketing campaigns featuring Disney characters and Ronald McDonald.
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 avocado-obsessed generation cares more about healthy foods than previous generations.
Target Market Changes
In response to this change in their target market, McDonald’s updated their products and services.
This is why today, McDonald’s offers healthier, fresher menu options, and more upscale coffee products.
What is a Target Audience?