A market consists of all the consumers who purchase a particular type of good or service. The market may be sub-divided into separate segments each of which are considered to be a separate market in its own right. Defining your market allows you to gain insights into the following:
- The size of the market you operate in
- The forecasted growth of the market you operate in
- Key competitors in the market you operate in
- Key target markets you could compete in
- The most appropriate marketing mix
A target market or segment is the consumers your business wants to sell its products and services to, and to whom it directs its marketing efforts. Identifying the target market is an essential step in the development of a marketing plan. A target market can be separated from the market as a whole by geography, buying power, demographics, as well as by psychographics.