Importance of Target Market in Business Management

Business owners often overlook the importance of setting up a specific target market for their products and services, thinking that wider the target market, more the sales and success. However, having an unlimited target market is actually less helpful for businesses. In this article, we will explore why it is important for businesses to have a strong target market basis. 

First, setting a strong target market allows business owners to prepare effective marketing strategies. Let’s take a tea cup for an example. If the target market for this tea cup business is set to “women of age 20 to 40”, it is considered to be a very broad target market. Such a big age group makes it difficult for the owners to promote the positives of their product. For example, women of age 20 may value the design of the cup, while women of age 40 may value the strength and durability of the cup. Having to consider multiple aspects to promote will make the advertisement way too complex and lack uniqueness. However, if the target market is set specifically, it will reduce the chances of marketing failure and improve the product’s image. 

Second, identifying a defined, narrow target market enables the owners to set appropriate prices for their products and/or services to be provided to the customers. For example, setting up prices for handmade items is often challenging, because on the one hand, it takes a lot of time and effort to create one item, but on the other hand, people who do not consider such effort will be dissatisfied by the pricing, calling them “too expensive”. However, if the target market is strictly defined to “people who have crafting hobbies”, the potential customers would not be intimidated by the price, because they have knowledge and experience of how challenging it is to create one item by human hand. 

Lastly, a constrained target market allows improvement of brand image. Because the customer group is strictly set to a specific group of people, businesses would strive to satisfy those people who count as their existing or potential customers. This will allow businesses to specialize and grow as a unique business, shaping the brand image as a business who is loyal, considerate, and hard-working for their customers. This will not only support the growth of the business, but also open up chances for product development. 

To conclude, setting up a specific target market will help business owners to become successful and provide improved products and services to all customers, and hence, it should not be ignored for business owners who seek to become an impactful business in the market.