How does the "target market" concept relate to a business plan?

Question

How does the "target market" concept relate to a business plan?

Answer 1

Both previous posters are correct.

Few businesses on earth - even the largest ones, have the financial resources to market their goods to "everyone." That's why it is critical that a company know which individuals represent the best prospect for their goods or services.

A business plan often includes a media strategy. So, the second person's point, you should know something about the media habits of your target audiences. Do they watch tv? If so, which channels do they watch? Do they listen to the radio? If so, which formats do they prefer? This type of list can go on and on depending on various demographic and psychographic factors.

Unless you are giving your products away for free, you will also want to know how much your customers are willing to pay for your product. This, too, will be influenced by who they are, where they live, how much discretionary income they have, etc - all of which help define your target market.

I hope this helps.

Answer 2

Your target market is the segment of the population or business that will be the most likely buyers for your product. For example, if you sell toys you don't find your target market by advertising on Comedy Central while Steven Colbert airs. You would be much more likely to find your market on Cartoon Network. Your target market is--in simple words the people you are most likely to sell to.  

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Answer 3

A target market is the group of people that you would like to market your service or product to.  When businesses get asked, "who is your target market" and they answer "everyone", they are sorely mistaken.  There are about 6 billion people on earth, and you have to choose which group or groups want your product / service.

This includes many factors such as demographics, pshycographics, geographics, religion, income, housing, etc (many more factors)