Target Market vs. Target Customer: Differences and Tips
By Indeed Editorial Team
Published December 14, 2021
The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.
There are several ways a company might categorize consumers when developing, marketing and selling its products. For example, businesses in many industries can identify their target markets and customers to learn how they might engage with both. Learning about these two groups of customers can help you improve your business strategies and performance within your organization. In this article, we discuss what target markets and target customers are, share the key differences between the two and provide tips for categorizing and working with different customer groups.
What is a target market?
A target market is a group of people to whom a company hopes to sell its products. Potential markets include categorizations of customers to target at once with specific product features and outreach. Several market examples include age groups, gender, income levels, interests and occupations. There are several main segments of target markets:
Geographic: Geographic is the market category where your customer lives or shops. This can be a certain region or global.
Psychographic: Psychographics is the market category that includes people's internal traits. This can include shopping habits, interests, values and personalities.
Demographic: Demographics are the social categories where a market fits. This includes age, gender, religion and marital status.
Behavioral: Behavioral traits are how individuals shop and interact with brands and companies. This includes shopping trends, payment methods and the likelihood customers might return.
What is a target customer?
A target customer is a more specific person or group of people within a market. Slightly different from the general target market, the target customer is the individual or group that might purchase the product. Rather than ranges, target customers may be more specific profiles, like boys age 8 instead of boys age 8-12. Companies often combine several target market segments to target specific customers for specialized marketing activities.
Target market vs. target customer
There are several ways that target markets and target customers differ:
Though a company may have several target markets and customers, the target market often contains more people. A target customer group is a smaller batch of people that fit into the market but might have more specialized interests. For example, your target market might include people interested in book publishing. Within this, a target customer might be someone interested in small press publishing or textbook publishing.
Related: How To Find My Target Market
Marketing activities can include email blasts, targeted advertising and promotions. Companies perform these for both target markets and customers receive, though target customers might receive more specific offers and content. For example, a company might market an expensive new smartwatch to all customers who earn over $60,000 per year, which is a target market. The target customer might be customers that have purchased compatible phone brands within the last two years. They might offer a special package deal to these target customers that includes an upgrade and a discounted price.
You can categorize target markets by identifying groups of people who are likely to have an interest in your product or company. You may explore different demographics and physical locations when categorizing and have several broad groups based on these characteristics. To categorize your target customer, you might identify who your ideal customer is and what qualities they have first. This often involves overlap between several market categories, like age, income and interests. You might research where your ideal customer shops and lives, why they purchase certain products and who they are to understand more about them.
Target markets often affect all the marketing decisions a company might make. For example, a cookware company may create packaging and pricing that matches the values of customers that cook frequently at home. Target customers can affect the advertisement and content methods a company uses. With more detailed information about specific customers, you can understand how they interact with your different channels, like social media platforms and websites, and provide advertisements that target specific needs.
Target markets are the broad groups of people that a company hopes to reach. Though customers might purchase products through general marketing awareness and brand engagement activities, the purpose of identifying and working with target marketing has more goals than just selling products. Identifying target customers helps you focus more on how you can sell products to specific individuals. This requires more detailed research about ideal customer personas with the specific intent of engaging them and selling products.
While marketing activities directed at a target market might influence if customers engage with a brand or buy products, target customers might work as an extension of the brand. This means target customers could be more likely to spread awareness of your brand and influence others to purchase your product. They might be experts in the field that you've learned about through their product testimonials, blogs or other tools. You might consider which type of customer can have the most positive influence on your brand and sales.
Tips for identifying and working with target groups
Here are some tips you can use when segmenting customers and improving marketing for these two groups:
Research both: Understanding both your target customers and markets can help you make business decisions, including product development and sales. Though target customers might help you expand your brand and make sales, your general target market can help increase brand recognition and engagement.
Create different marketing materials: As both might affect customer outcomes, creating specific marketing materials for each can help reduce costs, like advertising fees and employee wages. For example, you might only purchase social media ads on a site you know your target customer uses, rather than for your entire market.
Request feedback: Allowing customers in both groups to provide feedback can help you improve your strategies with each. You might provide questionnaires to your target market or request testimonials from target customers for you to build trust with both and respond to clear customer requests.
Learn from competitors: Observing how your competition handles their targets can provide you with new ideas for how you might proceed. Consider learning about your brand positioning or how customers view your brand among similar brands and strategize how you might improve your position.
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