The key to any marketing initiative is understanding the difference between these two terms. Both terms identify potential individuals with interest in a product or service; however, these terms are not interchangeable. A market is an extensive set of individuals, and this could be an entire country, region or gender within a select age category. A target audience is generally much smaller and might consist of a few hundred individuals within a large market who have specific interests. For brands and companies who have a broad appeal and or high demand the target audience may be close in size to the entire market.
Identify A Market
Identifying a profitable target market is usually the first step before narrowing in on a target audience. There are a few main factors to be evaluated to find a market; including market size, growth potential, future profitability, number of competitors, and the general demographics of the population. The demographics of the market will reveal consumer demands, buying habits, income, and lifestyle. With these demographics, a company can begin forming sales initiatives, product pricing, advertising campaigns, and product packaging.
Finding The Target Audience
A target audience within a broader market is more likely to drive growth by interacting and responding to advertisements. This smaller subset of individuals may still be very diverse but are likely to have similar interests, and habits. A niche product or service the more critical it is to identify the target audience. A small audience can have just as much of an impact on an overall business plan, especially when it comes to advertising and communications. The target audience should be loyal consumers, who are more likely to be repeat customers and advocates of the brand or company.
Each target audience within a market will be different, what works for one audience may not work for another, this can also be true for each market.
Exceptions To A Target Audience
For some companies or brands, an entire market will also become the target audience; however, there is always a smaller set of individuals who will be loyal and repeat customers. This exception is usual for well-known brands, in high demand, with a large demographic; advertisements with a broad reach may be more beneficial than only targeting a smaller audience. Companies with lesser brand recognition need precision in how and whom advertising campaigns are deployed. By knowing the target audience and the interaction with a brand, advertisements can be strategic in message and placement.
Every company and approach is likely to be different, in how to identify a profitable target market and how to grow their company through a target audience. Knowing the difference is imperative for a small company whose product or service may not be in high demand for a vast majority of the population.