A company's target market is the particular segment of the overall population that it aims to sell to. The primary target market is made up of consumers most likely to buy now. The secondary target market may be more likely to buy in the future or to influence someone else to buy.
Markets are segmented by demographics, geography, buying behaviors and psychographic traits such as lifestyle, interests and personality. Segmentation makes marketing efforts manageable and effective.
Companies setting a target market must be sure it is large enough to ensure profitability. If the market potential is too small to generate a profit, the company may be defining the target market too narrowly -- or it simply might not have a good enough product.
Most revenue will come from the primary target market. These customers share common characteristics and behaviors, account for the highest volume of sales and are most likely to buy now.
The secondary market includes future primary buyers, those buying at a high rate within a small segment and people who influence primary buyers. Their characteristics and buying behaviors usually differ from those of the primary market.
- Small Business Administration: Writing a Business Plan
- The Successful Marketing Plan; Roman Hiebing and Scott Cooper
- ESmallOffice.com: How to Identify a Target Market