A small business's target market is the group of people it targets with advertising. These people are the consumers who are most likely to use the company's products and services. Marketers use different variables when determining their target markets, including demographics, personal interests and the times in which consumers shop. Target markets can vary by size. But a company's target market generally must be large enough to earn a profit.
Gender and Age
Small businesses often target customers by gender or age. For example, a women's clothing retailer directs its promotional efforts at women. Conversely, a large and tall men's shop focuses its marketing efforts on tall and heavier men. Similarly, some small companies market to specific age groups. Companies selling life insurance for people close to retirement age may target people 50 and over. A rap-playing radio station may appeal more to people 25 and under. Businesses usually have some idea which age groups and genders they want to attract as they develop their products. Products may have been developed to satisfy a need for a particular age group. For example, male sex enhancers often are targeted toward those 40 and over.
Income is another variable that companies use to target customers. Discount retailers usually target middle- and lower-income consumers. Conversely, an upscale women's clothing retailer may target women with incomes over $75,000 annually. Similarly, luxury car dealers focus their marketing efforts on people with higher incomes. People with lower or average salaries are more likely to purchase cars or other products in their price range.
Target markets also can be distinguished by lifestyle preferences, according to Small Business Notes online. Lifestyle preferences often pertain to people's tastes, hobbies or interests. For example, health food stores often target diabetics or people with food allergies when selling gluten-free products. Boat and swimwear retailers focus on those who enjoy spending their leisure time in the water. And medical supply companies create mobile wheelchairs so elderly and disabled people can get around.
Small companies may identify target markets through various consumer purchasing cycles. This is particularly true of restaurants. A casual dining facility may receive regular lunchtime business from area business professionals. The same restaurant may attract families with small children and young couples for dinner. Hence, marketers often develop different menu items and products, depending on when people patronize their establishments.
Indentifying Target Markets
Small businesses can best identify their target markets through market research. For example, a small hardware company may conduct 300 phone surveys among customers in its various markets. The company may ask these consumers to provide information such as age, education, employment status, household size and income. This way, the company can develop profiles of its typical customers. For example, the hardware store's customers may primarily be men over 35 with incomes over $50,000 per year. The store owner may then run local television commercials that appeal to this particular segment. Small firms also can use warranty cards to obtain demographic and other information about their customers. These cards usually are distributed with new products.
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