What Is a Target Market? And How to Define Yours

Written by Coursera Staff • Updated on

Target markets help businesses craft compelling market strategies that can lead to successful market growth. Here's how to define the target market for your business.

[Featured image] A woman leads her marketing team in defining their target market by building a user persona on a whiteboard.

A target market is a specific group of people with shared characteristics that a business markets its products or services to. Companies use target markets to thoroughly understand their potential customers and craft marketing strategies that help them meet their business and marketing objectives.

Identifying a target market is an integral part of any new business undertaking, whether at a Fortune 500 company or a soon-to-be-launched small business. Knowing your target market sets you up for success.

This article will cover why target markets matter, examples of them in action, how they are defined through segmentation, and the range of marketing strategies used to reach them. You will also find next steps and suggested courses to help you in your next marketing endeavour. 

Target markets: Why they matter and examples

When you identify a target market, you can improve your overall marketing outcomes. In this section, you will learn why it matters and find examples of it in action to help you better understand how it works.

Why target markets matter

The purpose of identifying a target market is simple: to have a clear understanding of the possible customers that might purchase a product or service in order to direct marketing efforts.  

Knowing their target market helps businesses craft marketing campaigns that reach and appeal to their customer base. There are many ways to define a target market, including demographics, psychographics, firmographics, and customer behaviour.

Research suggests that thoroughly preparing a market strategy, which includes identifying a target market, could lead to marketing success. For example, one study conducted by CoSchedule found that marketers who documented their strategy were 414 per cent more likely to report success than those who didn’t [1]. A comprehensive understanding of a target market could help businesses meet their overall marketing objectives. 

Target market examples

Businesses define their target market to know who they are selling to and how to reach those customers through their marketing efforts. In effect, every product or service on the market today can be said to be directed toward a specific target market. 

A target market can be defined by various factors, such as shared demographic characteristics or traits. Some examples of target markets—and products that might be marketed within them—include the following:  

  • An action figure targeted to boys aged 9 to 14

  • A pair of vegan running shoes created from recycled materials targeted at eco-conscious athletes aged 24 to 45

  • A high-end, direct-to-door meal kit company that targets busy professionals with disposable income ages 30 to 45 

Target market vs. target audience 

Occasionally, people interchangeably use “target market” and “target audience.” But, despite their similarities, the terms refer to different groups of people.  

A target market is the overall group of people a business is trying to reach through its marketing efforts. Meanwhile, a target audience is a specific subset of the target market that a company attempts to reach through targeted marketing efforts.

For example, imagine a tech company has developed a smartwatch capable of taking phone calls, answering text messages, opening apps, and keeping track of the wearer’s blood pressure and step count.

Although the watch likely appeals to many people (the target market), the company might craft a specific advertising campaign emphasising the watch’s health features to attract an older audience of health-conscious consumers. This group of older health-conscious people is an example of a target audience. 


Target market segmentation: Defining a target market

Market segmentation is the process of dividing a market into smaller groups of people, or segments, to identify areas for possible market growth. Through segmentation, marketers can identify the key characteristics that define their target market and direct marketing efforts to their unique needs, interests, and personalities. 

To help you define your target audience, the section below contains descriptions of four of the most common types of market segmentation. Though each segmentation is distinct and offers its own view of a target market, it is also common for marketers to use many of them together to paint a more complex and telling portrait of their potential customers.   

Demographic segmentation

Demographic segmentation classifies consumers based on specific attributes, such as age or income level. Demographic segmentation offers a glimpse of consumers as actual people in the real world using common data collection methods. Typically, this segmentation is best used for business-to-customer (B2C) marketing efforts. 

Typical attributes to consider during demographic segmentation include: 

  • Age 

  • Gender identity

  • Ethnicity 

  • Sexual orientation

  • Income level 

  • Household size

  • Education level

  • Geographical location

Psychographic segmentation

Psychographic segmentation classifies consumers based on their psychological and personal traits, such as values and attitudes. Unlike demographic segmentation, which describes who consumers are, psychographic segmentation offers a glimpse into the motives behind why they buy something. Typically, this segmentation is helpful for business-to-consumer (B2C) and business-to-business (B2B) marketing efforts.

Common psychological characteristics and traits to consider during demographic segmentation include:

  • Personal values 

  • Religious beliefs 

  • Opinions

  • Attitudes

  • Aspirations

  • Political leanings

  • Lifestyle

Firmographic segmentation

Firmographic segmentation classifies companies and businesses into a set of shared attributes, such as their industry and number of employees. In effect, firmographics is akin to demographics, except that it focuses on the characteristics of businesses rather than people. As a result, it is used exclusively for B2B marketing. 

Common attributes to consider for firmographic segmentation include: 

  • Industry 

  • Location

  • Size

  • Status or Structure

  • Performance

Behavioural segmentation

Behavioural segmentation classifies consumers based on their behaviours surrounding products or services, such as when they decide to purchase them and how they use them. By focusing on consumer behaviour, behavioural segmentation provides a look into how consumers interact with businesses, which allows marketers to improve the effectiveness of their efforts. Typically, this segmentation is as useful for B2C as it is for B2B marketing efforts.

Common areas of consideration for behavioural segmentation include:

  • Usage frequency

  • Occasion

  • Brand loyalty

  • Benefits needed

4 target market strategies

A range of strategies allows you to market your product or service to your target market. Typically, these strategies are broken down from the broadest target market to the most narrow and specific. The exact method you use will largely depend on the target market you have identified. 

Read on to learn more about four of the most major target marketing strategies. 

1. Mass marketing

Mass marketing is a marketing strategy that forgoes segmenting a market and instead advertises to the broadest possible number of people. Unlike other marketing efforts, mass marketing doesn’t create different campaigns for different market segments but instead runs a single campaign for the entire market.

Mass marketing is particularly attractive to companies selling products or services with broad appeal. For example, gas companies, telecommunications companies, and manufacturers of salt and sugar typically only conduct mass marketing campaigns because nearly the entire market uses their products. 

2. Differentiated marketing 

Differentiated marketing is a marketing strategy in which a business creates different marketing campaigns to appeal to different target audiences. By differentiating their marketing campaigns, businesses are able to more effectively articulate their value proposition to various market segments and, ideally, increase the success of their marketing strategy. 

In order to reach diverse segments, differentiated marketing requires businesses to dedicate more of their budget to the creation of different marketing campaigns. As a result, differentiated marketing is a strategy well-suited to businesses selling goods and services to a target market composed of distinct target audiences. 

3. Niche marketing 

Niche marketing is a marketing strategy in which a business focuses all its marketing efforts on a highly specific and unique target market. As a result, niche marketing often targets gaps in the marketplace, where the needs of specific customers are not currently being met. 

In targeting a niche, businesses can craft highly targeted advertising campaigns that appeal to their specific market. In turn, these efforts are well-suited to smaller businesses looking to enter an already crowded marketplace that nonetheless includes several, specific gaps that are currently not being serviced.

4. Micromarketing 

Micromarketing is a marketing strategy that specifically targets a narrow segment of a niche market. Typically, the target audience of a micromarketing campaign is defined by specific characteristics such as age, job title, geographic location, or gender. 

As a marketing effort that targets a highly specific group, micromarketing can also be more costly than other marketing strategies, such as mass marketing. In effect, micromarketing is best suited for target audiences where the rewards outweigh the potentially costly effort to reach them.

Get market ready

To understand more about target markets and the strategies that suit the needs of your business, you might consider expanding your marketing knowledge by taking a Professional Certificate, such as the Google Digital Marketing and E-Commerce Professional Certificate. This will provide you with the skills to be job ready for an entry-level marketing role, or to give yourself a better grounding in marketing for your business in under six months.

Article sources

  1. CoSchedule. “Trend Report: Marketing Strategy 2022, https://coschedule.com/marketing-statistics.” Accessed August 21, 2023.

Keep reading

Updated on
Written by:

Editorial Team

Coursera’s editorial team is comprised of highly experienced professional editors, writers, and fact...

This content has been made available for informational purposes only. Learners are advised to conduct additional research to ensure that courses and other credentials pursued meet their personal, professional, and financial goals.