What Is a Target Market and How Do You Find Yours?

Your target market represents your ideal customers—those you believe are most likely to purchase your products or services. 

A clearly defined target market is a critical component of your business strategy. “It’s important to know who your customers are to develop products to serve them,” says Jono Pandolfi, owner of dinnerware brand Jono Pandolfi Designs. 

Here’s how to define and reach your business’s target market, with expert insights from Jono Pandolfi and his brother Nick Pandolfi, the company’s COO and CFO.

What is a target market? 

A target market is a group of consumers most likely to buy a brand’s products or services. By defining your target market, you identify the shared characteristics of your customers so that you can better connect with them. The idea is that if you understand your market, you’ll have more certainty that your products or services meet their needs, and you can create marketing materials that appeal to them.

Example of a target market

Dinnerware brand Jono Pandolfi Designs has multiple target markets, which map to different sales channels. On the business-to-business (B2B) side, their target market is chefs and hospitality groups. On the direct-to-consumer (DTC) side, their target market is serious home cooks who want to serve restaurant-quality food.

For Jono, these two target markets are connected, as the B2B channel helps the brand reach their DTC target market. “The biggest driver of sales is people who have seen us in restaurants,” Jono says. “That’s often the first touchpoint: They go to dinner at a high-end restaurant that uses our plates. That’s how they learn about our brand.”

How to define your target market 

• Study existing customers
• Analyze competitors
• Conduct secondary market research

There’s more than one way to approach the process of defining your target market. Here are three ways to get started.

Study existing customers

If you’re already in-market, study your current customer base using surveys, interviews, or focus groups to identify common characteristics. For Jono, connecting with customers in person via annual pop-up shops is most fruitful. “Talking to customers face to face at those pop-up shops has really kind of helped inform who our customers are,” says Nick. 

Over the years, the brand has come to understand key demographic and behavioral aspects of their target audience, like their higher-income level, potential to own a second home, and affinity for dining at influential restaurants.

Analyze competitors

Research competitor audiences to identify the characteristics of their target consumers. This approach requires a bit of sleuthing: Study the competitor’s online presence to understand who it’s targeting. Look at customers who engage with the brand on social, scour product reviews for characteristics of happy customers, and examine the brand’s own marketing materials, using your findings to make an educated guess about the consumers the business is targeting. 

Next, consider what differentiates your niche market, and identify factors that might cause a consumer to choose your business over the competition. Outline the behavioral or demographic characteristics of the audience group that would make that choice. You can use interviews, focus groups, or other market research tactics to validate those assumptions.

Conduct secondary market research 

Use secondary market research to gain insights into the consumers in your broader market. Consult trade journals and government or industry reports for characteristics shared by consumers of your product or service type, and undertake primary research to confirm those findings later on.

These publishers share reputable reports on consumer behavior trends:

• McKinsey & Company
• Gartner
• Pew Research Center 

How to use target market segmentation

Target market segmentation breaks your target market into subgroups with even more granular characteristics so that you can further refine your marketing efforts.

Here are five ways you can segment your audience:

• Demographic segmentation. Based on demographic characteristics, such as age, gender, family status, or income level.
• Psychographic segmentation. Based on personal values, beliefs, interests, or benefits sought.
• Geographic segmentation. Based on the consumer’s physical location.
• Behavioral segmentation. Based on past interactions with a brand, such as browsing activity, purchasing habits, or engagement with marketing materials.
• Predictive segmentation. Based on the probability of future behaviors, as calculated by an artificial intelligence tool with predictive capabilities.

Segmentation doesn’t have to be one and done; you might segment your audience in different ways for different campaigns. For example, Jono Pandolfi Designs uses geographic and predictive segmentation to define the target market for their pop-up shops, then develops a direct mail campaign to reach them.

The company uses geographic location and previous consumer behavior to identify consumers likely to attend the event and purchase products. “We’ll often do a mailer before a shop to a geo-targeted audience,” Nick says. “We will also segment based on likelihood to buy.” The brand uses predictive technology to determine purchase likelihood.

Predictive marketing analytics tools like Klaviyo identify behavioral patterns that indicate purchase likelihood, and they segment customers based on their probability of conversion. Nick thinks this is a better predictor of future behavior than interests and other psychographic information. 

"I think that a bigger factor is data about the customer, such as whether or not they’ve visited your site or whether or not they’ve purchased," Nick says. “It’s more about their familiarity with the brand and where they are in the marketing funnel and less about interest in fine dining or high-end architecture or whatever it might be. Klaviyo will identify which customers are likely to purchase again soon based on their past purchase history.”