When creating an advertising and marketing plan for your small business, you need to take two key factors into account: your target market and your target audience.
While these terms might sound the same, they actually have differences—and for small businesses looking to make more sales, understanding both is key to boosting market share (especially for local brands). A target market is a broad group of potential customers who share common characteristics such as age, income, or geographic location. Meanwhile, a target audience is a specific segment within that target market identified through market research and target market segmentation.
In this guide, we’ll break down the target market vs. target audience conversation in detail; we’ll define both, explore some nuances related to each, compare them in-depth, and teach you how to identify them. Understanding the differences between your target market and your target audience will help you level up your advertising efforts and secure more customers.
To effectively compare target market vs. target audience, we first need to define our key terms. Let’s start with the former.
Simply put, a target market is a large group of people you think would be most likely to buy your product or use your services.
Target markets are somewhat broad, and they typically share a common characteristic (or group of characteristics) like:
If your brand sells a wide variety of products, you might identify your target market using a few of these characteristics. If you run a local nail salon, for instance, your target market might include people with disposable income who live near your physical location and value self-care.
If you only sell one product or service, however, your target market might be narrower. If you sell electrical supplies (like wire and conduit), for example, your target market might only include licensed electricians in your area.
Identifying your target market is the first step to advertising to the people most likely to buy your products. A local nail salon wouldn’t want to target people who live too far outside of their geographic range, and an electrical supplies company wouldn’t want to target people who work in tile installation, for instance.
Making efforts to identify your entire target market will help you optimize your marketing and advertising efforts (and spending) and boost your return on investment (ROI).
The characteristics listed above (age range, household income, and so on) generally fall into one of four categories called market segments:
Taking all four of these elements into account can help you develop a clear, specific picture of your target market—even if your market is somewhat large.
Now, let’s define our second key term: the target audience.
A target audience is a smaller group that fits within your target market; in other words, an audience is a segment of your market.
Small businesses might want to identify individual audiences inside their overall market to best tailor their marketing efforts to specific groups. While segmentation is the process of identifying these audiences (and we’ll break that concept down in the next section), targeting involves creating marketing and advertising materials and approaches that play to a specific audience.
A target audience shares specific characteristics—not unlike your target market. However, audiences typically share more specific traits. What might that look like?
These are just two examples of more niche target audiences within a target market.
The process of identifying specific audiences inside your target market is called audience segmentation. Segmenting your market into specific audiences is crucial for small businesses, especially ahead of a marketing campaign—it can make the difference between significant engagement and lost investment.
For example, take a look at Dementia UK: a non-profit organization that recently shattered its expectations by advertising on Nextdoor.
To increase engagement with their advertising campaign, they specifically targeted seniors looking to create wills and other end-of-life documents during Free Wills Month, a period when various UK-based charities offer free will preparation services for people over the age of 55.
By zeroing in on the specific target audience looking to get their end-of-life affairs in order, they boosted their overall impressions and gained insights to support their future marketing pushes.
Let’s get into the meat of our guide about target market vs. target audience—how do they compare?
How do brands discern between their target market and target audiences? For a master class, take a look at Hoover, a well-known vacuum brand. While their target market is quite broad, they recently targeted one specific segment of their market: people who recently moved.
“New Movers” have unique needs. Perhaps they had to leave their vacuum behind during their move, or maybe they needed a new one for a move-out clean. Hoover identified these unique needs and created a targeted ad campaign specifically directed toward New Movers—a campaign that performed above expectations.
Identifying your target market is relatively simple:
Identifying your target audiences is a somewhat more in-depth process. One of the best ways to segment your market into audiences is to assess your customer data. Some potential sources for that data include:
Understanding target market vs. target audience is a must for any small or local business looking to make the most of their marketing and advertising efforts—and make sure their products and services continue to meet customer expectations.
While effective targeting is paramount, it isn’t always easy. Fortunately, leveraging tools like Nextdoor Ads Manager makes it simple; with just a few clicks, you can explore customer data, boost engagement, build real relationships with local customers, and grow your business.
Ready to revolutionize your local marketing and build a strong sales base? Get started with Nextdoor Ads Manager now.
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