Final answer:
A target market is a group of people who would be interested in buying a given product or service. It helps businesses target their products and marketing strategies efficiently. In contrast, customers are those who actually purchase the product or service.
Step-by-step explanation:
The term you are looking for is target market. A target market is a group of people who would be interested in buying a given product or service. This concept is vital for businesses to understand as it helps them tailor their products and marketing strategies to meet the specific needs and preferences of a particular audience.
By identifying and understanding their target market, businesses can more efficiently allocate their resources and create more effective marketing campaigns.
For example, a basket of goods and services purchased by this group would reflect the particular demands of that market. In contrast, a customer is a person or organization that actually purchases the product or service. Therefore, while all customers of a product belong to its target market, not everyone in a target market must necessarily be a current customer.
Various factors such as wealth, income, education, and occupation can define a target market, forming a common social status among its members. Companies must navigate through the complexities of supply and demand, establish an equilibrium price, and understand the features of the market such as whether it's a thick or thin market, in order to successfully reach and serve their target market.