Target Market Strategies for Successful Business

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  • 0:10 Target Market
  • 0:48 Identifying Target Markets
  • 2:45 Marketing Mix
  • 6:22 Lesson Summary
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Lesson Transcript
Instructor: Jennifer Lombardo
If you've ever felt persuaded to buy an item by an ad, you've likely been defined as part of a target market. Though you may not know it, advertisements are created specifically for people similar to you. In this lesson, you'll learn how marketing firms identify a target market, create basic target market strategies and use a marketing mix for a product or service.

Target Market

A marketing strategy is selecting and describing one or more target markets that a company's product or service will identify for business opportunities. A target market is a defined group most likely to buy a company's products or services. This group usually has similar product needs, such as college students who usually have an appetite for affordable cars, technology products, dorm room goods, etc. Once a target market is identified by a company, a target market strategy needs to be created in order to decide on how to promote, communicate and reach the group. There are three ways that a firm can identify target markets.

Identifying Target Markets

The first step is to conduct an MOA (Marketing Opportunity Analysis). This analysis allows companies to investigate the potential size of the market, profitability potential, and the amount of competition. The next step is to choose the basic target market strategy. The three strategies for selecting target markets are pursuing entire markets with one marketing mix, concentrating on one segment, or pursuing multiple market segments with multiple marketing mixes.

Examples of different target markets could be men who drink diet soda, parents with young children, or college students who need affordable cars. A company that concentrates on an entire market with one marketing mix would be producers of milk. They know that a large market exists for their products. An example of a company that targets one single target market would be Lady Foot Locker - of course women who are active would be their target market.

The last target marketing strategy example is for pursuing multiple marketing segments with multiple marketing mixes. The king of this strategy is Disney. Think of the different types of Disney ads you see. There are ads appealing to young parents with kids, teenagers, honeymoon couples, and even senior citizens. Disney promotes different messages to each of these different segments very successfully. Disney's message to parents with kids is all about making sure your kids don't miss out on a Disney experience. The message to honeymooners is all about having your fairytale wedding at Disney and be a real Prince Charming and Snow White. Lastly, their message to seniors is to come to Disney to feel young again. Once a target market (or markets) have been chosen, then the company must plan on the correct way to reach the consumers with the best product, service, price, place, and promotion.

Marketing Mix

A marketing mix is the perfect selection of product, place, price and promotion strategies used to have mutually beneficial exchanges with a target market. In the marketing world, a marketing mix is also referred to as the Four P's. The P's being: product, place, price, and promotion. Sometimes a product will fail because just one part of the marketing mix is incorrect.

A marketing mix must carefully be created to reach the specific target market that a company is trying to reach. For example, there is a big difference between McDonald's and Wendy's fast food restaurants. The mixes are carefully created to cater to cheap packaged food with family fun play areas (McDonald's) and healthier fast food, fresh burgers made to order and no playgrounds (Wendy's).

Product Strategies

The heart of the marketing mix is of course the product or service. It is the beginning point of the entire mix and strategy. When referring to a product, you also must consider the packaging, warranty, after-sales follow-up, brand name and company name. After all, eating at TGI Friday's is a big difference than eating at Morton's Steakhouse. All of these factors come into play when creating a product strategy. Products can be tangible goods, such as televisions, or services, such as spa treatments.

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