What Is a Target Market?
Our definition: The slice of the population your business is most relevant to
Official definition: “a set of buyers sharing common needs or characteristics that a company decides to serve” (Encyclopedia of Business and Finance, 2nd ed).
Origins: The phrase “target market” emerged in the 1960s and has been increasing in popularity ever since. Target marketing has developed from a fringe idea to an essential strategy.
A target market is not:
Imaginary. Your target market is a set of real people you are relying on for the survival of your business. Especially in the startup phase, defining a target market might feel like an intellectual or creative activity. Don’t forget that it has very real implications.
Limiting. While it might seem counterintuitive, defining a target market increases rather than decreases your sales potential. Getting 10% of all urban teenage girls who love the color blue and own iPhones to buy your product will result in a lot more revenue than getting 0% of “American men.”
Just a paragraph in your business plan. Before every decision you make, ask yourself, “What will my target market think?” If you don’t get in the habit of actually applying what you know about your customers and future customers, you could end up with no customers at all.