Title: Target Market Identification | Small Business - Chron.com
Headings: Target Market Identification
Target Market Identification
Characteristics
Importance
Process
Considerations
References

Content: Next, companies look at each segment’s attractiveness. To use the example of the coffee shop, a neighborhood may have a large concentration of high school and college students, but if that population is not likely to stick around, targeting students could be a mistake. Older people may start to classify that place as a place students hang out and choose a different coffee shop to frequent as a result; when the students move away, the coffee shop would have to try to win back its older clientele; clientele that may have already developed a strong preference for another coffee shop. Considerations
Lastly, the company has to look at its own objectives, capabilities and resources, carefully examining the profit to be had by targeting a particular audience. For example, the baby boomer generation may be the largest segment of the population by age, but they are also less willing to spend on luxury items than their younger counterparts. For a luxury retailer, this is an important distinction; it needs to target the segment that is likely to spend the most on its products. Likewise, if a company cannot compete with the low-price providers, it is not going to target customers focused solely on the bottom line, but may instead try to demonstrate value or feature desirability.