A target market is a set of buyers sharing common needs or characteristics that a company decides to serve. A company identifies a target market in order to organize its tasks and cope with the particular demands of the marketplace. Target marketing forms the foundation of a modern marketing strategy because doing it well helps a company be more efficient and effective by focusing on a certain segment of its market that it can best satisfy.

Targeting also benefits consumers because a company can reach specific groups of consumers with offers carefully tailored to satisfy their needs. To do so, a company has to evaluate the various segments and decide how many, and which one, to target. There is no single way to segment a market. A company needs to research different segmentation variables alone, and in combination with others, to find its target market. There...