A LevelBusinessAQARevision NotesManaging MarketingTarget MarketThe Target Market

The Target Market (AQA A Level Business): Revision Note

Syllabus Edition

First teaching 2026

First exams 2028

Exam code: 7132

Lisa Eades

Written by: Lisa Eades

Reviewed by: Bridgette Barrett

Updated on

Choosing a target market

  • A target market is the specific group of customers a business decides to focus its products or services on

    • Rather than trying to appeal to everyone, businesses identify which group of people they can best serve, most profitably

  • Once the wider market has been segmented (divided into groups by demographics, geography, psychographics, or behaviour), a business must decide which segment(s) to target and how to enter that market

Influences on choosing a target market

Diagram showing factors influencing choice of target market: size, growth, competition, profitability, customer needs, resources, and fit with business objectives
Businesses consider factors including the size and growth potential of a market and the nature of competition before determining their target market

Size and growth potential

  • A larger market offers more potential customers and higher revenue

  • A growing market suggests future opportunities but can also attract more competitors

  • Some businesses deliberately choose a smaller niche to avoid intense competition

Level of competition

  • A market with few competitors may be easier to enter and establish a presence in

  • Highly competitive markets make it harder to win customers and maintain profit margins

  • Businesses assess whether they can differentiate themselves enough to compete effectively

Business resources and capabilities

  • The business must have the skills, technology and finance needed to serve the target market well

  • A smaller business with limited funds may target a specialist market where costs are lower

  • Entering a large, competitive market often requires significant investment in production, distribution and marketing

Potential profitability

  • The target market must offer a realistic prospect of profit

  • This depends on;

    • The price customers will pay

    • The likely volume of sales

    • The cost of reaching and serving those customers

Fit with business objectives

  • The chosen market must align with the business's wider aims

    • For example, a business committed to sustainability may target environmentally conscious consumers

    • A business pursuing rapid growth may prioritise large, fast-growing markets over more profitable but slower ones

Customer needs and preferences

  • The business must be confident it can meet customer needs better than its rivals

  • Understanding what customers value most is essential to making the right choice

    • Is it price, quality, convenience or brand image - or a combination?

Influences on entering a target market

  • Deciding which market to target and actually getting into that market are two different challenges

Influence

Explanation

Barriers to entry

  • These are obstacles that make it difficult for new competitors to enter a market:

  • Economies of scale

    • Established firms can produce at a lower cost per unit, making it hard for new entrants to compete on price

  • Brand loyalty

    • Customers may be reluctant to switch from trusted, well-known brands

  • High set-up costs

    • Some markets (e.g. car manufacturing or pharmaceuticals) require enormous capital investment before trading can begin

  • Legal and regulatory barriers

    • Licences, patents, or government regulations can restrict who is allowed to operate in a market

Cost and financial risk

  • Entering a new market involves spending money with no guarantee of success

  • The higher the cost of entry, the more carefully a business must weigh up whether the potential returns justify the risk

Time required to establish

  • Building brand awareness and a loyal customer base takes time

  • Businesses must be able to sustain operations and absorb losses until they become established and profitable

Access to suppliers and distributors

  • Established competitors may have exclusive agreements with key suppliers or distributors

  • This can make it difficult for new entrants to access the supply chain or get products to customers

Examiner Tips and Tricks

When assessing whether a business should enter a particular target market, always link your answer to the specific business in the case study. The 'right' market depends on the firm's size, financial resources, existing strengths, and objectives - there is no one-size-fits-all answer

The marketing mix and target market

  • The marketing mix - often called the 4Ps - covers four key decisions;

    • Product

    • Price

    • Place

    • Promotion

  • Once a business has chosen its target market, it must design its marketing mix around the needs and characteristics of that market

  • Every element of the marketing mix must be appropriate for the target market

    • A mismatch between any element and the target customer will undermine the marketing strategy

Product

Price

The product must be designed or adapted to meet the specific needs and preferences of the target market

  • Features and design

    • Tailored to what the target customer values

    • E.g. a luxury brand uses premium materials and refined design for high-income consumers

  • Quality

    • A mass-market product may prioritise affordability and reliability

    • A niche, premium product prioritises high quality and exclusivity

  • Branding

    • The brand image must resonate with the target market's identity, values and aspirations

  • Range

    • Businesses may offer a range of options to appeal to different sub-groups within the target market

    • E.g. a clothing brand offering both budget and premium lines

The pricing strategy must reflect what the target market is willing and able to pay

  • Premium pricing

    • For high-income or status-conscious consumers who associate a higher price with superior quality

    • E.g. luxury cars, designer clothing

  • Penetration pricing

    • A low initial price to attract price-sensitive consumers and build market share quickly, particularly when entering a competitive market

  • Competitive pricing

    • Matching or undercutting rivals' prices in a price-sensitive mass market where customers can easily compare alternatives

  • Price skimming

    • Charging a high price initially (common with new technology) before gradually reducing it as the product matures and targets a broader market

Place (Distribution)

Promotion

The distribution channels chosen must allow the product to reach the target market efficiently and conveniently

  • Online/e-commerce

    • Highly effective for younger, digitally-active consumers and those who prefer the convenience of home delivery

  • Physical retail stores

    • Important for consumers who prefer to see, try, or experience a product before purchasing

  • Exclusive distribution

    • Luxury brands often sell only through select, high-end outlets to maintain a premium image and sense of exclusivity

  • Direct sales

    • Selling directly to the customer (bypassing retailers) can allow lower prices or a more personalised experience

The promotional strategy must reach the target market through the right channels and communicate the right messages

  • Social media advertising

    • Highly effective for younger consumers (e.g. Instagram, TikTok, YouTube)

    • Allows precise targeting by age, interests and behaviour

  • Television advertising

    • Reaches a broad audience and builds brand awareness

    • Most effective for mass-market products

  • Print media

    • Newspapers and specialist magazines can target specific demographics

    • E.g. a financial product advertised in a business publication

  • Influencer marketing

    • Works well with younger, social-media-active audiences who trust recommendations from people they follow

  • Sponsorship

    • Builds brand association with activities or events that the target market values

    • E.g., sports sponsorship for an active lifestyle brand

Why consistency matters

  • All four elements of the marketing mix must work together coherently, and all must be suited to the target market

  • A mismatch between any element creates confusion and undermines the brand

    • A premium product priced at a luxury level must be sold in upmarket outlets and promoted through aspirational channels; otherwise, customers lose confidence in the brand

    • A budget product sold through exclusive boutiques at a high price will confuse its intended target market and fail to attract the right customers

Case Study

Gymshark

Founded in 2012 by 19-year-old Ben Francis in Solihull, Gymshark targets young fitness enthusiasts aged 16–30 who want gym wear that combines performance with style

Every element of its marketing mix is built around this customer

  • The product is functional but stylish, with moisture-wicking fabrics, a strong aesthetic, and body-positive sizing that resonates with its socially aware audience

  • New collections are released as timed "drops," creating urgency and excitement, a tactic copied from streetwear brands that Gymshark's young target market already responds to

  • Pricing is accessible premium (£20–£60) - affordable for students and young adults, yet aspirational enough to feel like a genuine brand choice rather than a budget compromise

  • Distribution is almost entirely direct-to-consumer through gymshark.com, reflecting the fact that its target market shops online as a default

    • Occasional pop-up events at fitness events reinforce community without requiring a costly high-street presence

  • Promotion runs almost exclusively through social media and a network of fitness influencers on Instagram, TikTok, and YouTube; these channels are what its target market trusts far more than traditional advertising

With every decision driven by the same target customer, Gymshark has grown from a garage business to a £1 billion brand (Forbes, 2020)

Examiner Tips and Tricks

In evaluation questions, consider whether a business's marketing mix is internally consistent as well as appropriate for the target market. Real-world marketing failures often come down to a mismatch - for example, a luxury price point combined with discount retail distribution. This is a strong evaluative point that goes beyond simply listing the 4Ps

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Author
Reviewer
Lisa Eades

Author: Lisa Eades

Expertise: Curriculum Expert

Lisa has taught A Level, GCSE, BTEC and IBDP Business for over 20 years and is a senior Examiner for Edexcel. Lisa has been a successful Head of Department in Kent and has offered private Business tuition to students across the UK. Lisa loves to create imaginative and accessible resources which engage learners and build their passion for the subject.

Bridgette Barrett

Reviewer: Bridgette Barrett

Expertise: Development Editor

After graduating with a degree in Geography, Bridgette completed a PGCE over 30 years ago. She later gained an MA Learning, Technology and Education from the University of Nottingham focussing on online learning. At a time when the study of geography has never been more important, Bridgette is passionate about creating content which supports students in achieving their potential in geography and builds their confidence.