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Identifying the Target Market : how it impacts advertising strategies

    Identifying the Target Market

    Recognizing the core target market(s) for a given product or service is integral to maximizing advertising spend.


    Explore the process of identifying the target market and how it impacts advertising strategies


    Key Points

    • In marketing, a target market should provide an organization the best possible return on its investments from an advertising perspective. As a result, identifying the target market is an important aspect of the process.
    • The process begins with segmentation. From the entire potential market, the organization must identify its core customers who are most likely to purchase their products.
    • Segmentation should be done on various parameters, such as demographic, geographic, pyschographic, and behavioral ones.
    • Once segments are identified, the organization should rank each segment based on their objectives, vision, mission and core competency. This should enable a small number of target markets to be selected.
    • Once these target markets are selected, the organization should position the firm competitively to capture that target market.

    Key Terms

    • segmentation: The process of identifying various groupings within the broader market.

    Target Markets

    When developing an advertising campaign, be it organization-wide or product-specific, a critical input is identifying the target market. Creating generic advertising campaigns for the entire population is usually not strategic, both in terms of focus and capital. Advertisers should instead narrow down the population to an ideal segment, based upon various factors. This is called segmentation.


    The segmentation process can be summarized in seven simple steps. These steps can fit within three primary categories: segmentation, targeting, and positioning. Combined, these seven steps will demonstrate how to identify a target market through segmentation, and how to capture it through positioning.


    1. The first step is identifying the broader market in which the organization operates. For example, a company that sells beer operates in a market of alcohol drinkers over a certain age located within specific regions of production and distribution.
    2. Next, the organization must identify, select, and apply parameters that will be used to create the segments. Common examples include demographic data, psychographic data, behavioral metrics, and geographic information. However, there are essentially infinite ways to segment a market, depending on what is best for the organization.
    3. Finally, the organization should refine and commit to certain segmentation profiles. These profiles will act as potential strategic options in the targeting and positioning in the next segments.


    1. Now that each segment has been identified, the organization should evaluate the attractiveness of each profile. Ranking these in some way for potential profitability is a critical component.
    2. Once a proper system of prioritization amongst segments is established, it’s fairly easy to let the best segment(s) float to the top. These segments represent the optimal strategic opportunity in regards to target markets. At this point, the target market has been identified.


    1. However, the marketing work doesn’t stop at identifying the optimal market. The organization must identify the relative competitive role compared to the segment and the competition. What does the organization stand for? How does that differentiate them?
    2. Finally, once the ideal markets and positioning are established, the organization is ready to prepare customized marketing material for each specified segment.
    This image illustrates the process of identifying a target market through a flow chat. It is a useful overview of the general concept behind determining a target market.

    Identifying Target Segments (STP Approach): This image illustrates the process of identifying a target market through a flow chat. It is a useful overview of the general concept behind determining a target market.

    Once an organization understands the broader market, and their relative role within it, targeted advertising should come fairly naturally as marketers experiment and gather data. Firms must pay close attention to their relative position within key markets, and maintain a strong, differentiated presence to achieve competitive advantage.

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