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Target Market Analysis: Definition & Examples

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  • 0:03 What Is a Target…
  • 1:38 Target Market Analysis
  • 5:20 Lesson Summary
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Lesson Transcript
Instructor: Susan Fenner

Susan has an MBA in Management from the University of North Alabama. She teaches online and campus-based Business courses.

Identifying your target market is the first step to a successful marketing campaign. But what do we mean by a target market analysis, and how can it help an organization allocate precious resources wisely? Let's take a closer look.

What Is a Target Market Analysis?

Meet Gus, a 23-year-old college freshman. Gus is considering pursuing a career in marketing after finishing college. He was thrilled when his adviser was able to arrange for him to serve as an intern at the city's most prestigious marketing firm. His mentor is Carl Davis, a highly respected marketing executive with over 30 years experience.

Today is Gus' first day on the job, and he wants to make a good impression. He and Carl sat through a presentation this morning where the CEO talked about a target market analysis, segmentation, and demographics. He watched as everyone took notes and nodded their head in agreement. But later, when Carl asked him for his thoughts on the meeting, he had to admit that he didn't really understand what they were talking about.

Carl explained that, simply put, a target market is the group of customers who are most likely to buy your product. A target market analysis is a systematic and comprehensive assessment that allows you to identify important characteristics of your target market and group them into categories based on those characteristics. Segmenting the market in this way not only identifies the customers who are most likely to buy your product, it also identifies the best way to reach them. This knowledge lets an organization focus their resources where they're mostly likely to get the largest return on their investment

Gus was intrigued. Carl explained that there are so many things to consider when conducting a target market analysis. He told Gus that his first assignment is to research the type of information that's included in the assessment. Let's take a look at what Gus discovered.

Target Market Analysis

Gus found that while there are small differences in the approach taken to conduct a target market analysis, there are basic activities that go into conducting a comprehensive assessment. For example:

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