Process: Identifying target market

Question 1

What is a target market

Answer 1

A target market is a group of present and potential customers to which a business intends to sell its product. The customers within the target market share similar characteristics such as age, income, lifestyle, location and spending patterns.

The teenage/young adult market, for example:
➢ consists of people between 15 and 19 years of age and makes up 5% of 
Australia’s population 

➢ has more disposable income than in the past 

➢ is more willing to spend on themselves 

➢ purchase approximately 25% of all takeaway food 

➢ has spent about $950 million on clothing in the past year 


Question 2

What is a primary target market

Answer 2

A primary target market is the market segment at which most of the marketing resources focus on.

Question 3

What is a secondary target market

Answer 3

A secondary target market is usually a smaller and less important market segment. 


Question 4

Why does a business need a target market

Answer 4

A business identifies and selects a target market so it can direct its marketing strategies to that group of customers. 
This occurs because the business is able to:


➢ use its marketing resources more efficiently (cost and time)

➢ better understand the consumer buying behaviour of the target market ➢ collect data more effectively and make comparisons over time

➢ refine the marketing strategies used to influence customer choice 
Businesses can choose one of three approaches to identifying and selecting a consumer target market: 


Question 5

Target market approaches

Answer 5

Mass market - Seeks a large range of customers. Assumes people within target market have similar needs

Market segmentation - When total market is subdivided into groups who share common characteristics. One the market has been segmented the business selects one of the segments enables the marketing to meet needs of uniform group

Niche Marketing - Narrowly selected market, segment within a segment, micro market. Such business cater towards a narrow target market

Question 6

Toyota case study

Answer 6

Corolla -
Promotion strategies:

billboards, radio, newspapers, flyers, television, the Internet, yellow pages, word of mouth, public relations and brochures

Target market:
Middle-class and working customers
Mostly middle-aged people
For people who are looking for affordable cars → low maintenance costs - low prices but high quality vehicles
Price range: $29,270 - $40,450
Majority are females

Market approach:
Segment
Demographic = 30-50 years bracket
Behavioural/
psychological = quality and reliability of the Corolla has allowed them to remain in the top ranks

Hilux -
Promotion strategies:

Advertised to be very durable and strong → using words/slogans/phrases on their website such as “Steadfast and rugged”, “served generations of Australians for over 50 years”, “legendary ute” “An Unbreakable Bond”
They have built a reputation on it already

Target market:

old men
Tradies
builders/labourers
Farmers
Australian demographic
outback/travellers
Adventurous
Family
Price range: $26,475 to $74,990, which is generally more expensive than average ($37,362).

Market approach:

Segmented
Primary target-
Typically associated with tradies and outback use,
Beginning to develop a secondary target market-
Recent advertising has appealed to a broader range of target markets, e.g. families and adventure

Factors Influencing Consumer Choice
Psychological (premium price)

Lexus:

Target market:

Lexus is the luxury vehicle division of the Japanese automaker Toyota Motor Corporation. The Lexus brand is marketed in more than 90 countries and territories worldwide and is Japan’s largest-selling make of premium cars.

Publicity
I Need To Talk About The Lexus TX’s Bizarre Cup Holders
2021-2024 Lexus LX recalled for transmission fault - Drive
Recall for almost 30,000 Toyota LandCruiser and Lexus LX vehicles - carsales.com.au
2021-2024 Lexus LX recalled for transmission fault
Advertisements
Lexus: Feel at Home
Top 10 Lexus Advertisements / Best Lexus Advertisements
Highlight distinctive features like balance, relentless, perfection, smoothness and precision

Target market:
Upper class + high income
Average buyer → male in 50s
Those seeking luxury, quality and safety standards beyond an ordinary automobile
Luxury brand of toyota
Price → 46,085 - 220,888
Lexus customers are extremely loyal at 47.6%

Market approach:
Niche
Group of individuals who felt under-served by luxury brands

Upper class