IB Business Management Higher Level (HL) Practice Test

Focusing on a clearly defined group of customers a business aims to serve means choosing a target market. After a company segments the market into groups with shared needs or characteristics, it selects one or more segments to prioritize and designs its product, price, promotion, and distribution around that group. This makes the idea of a target market the best fit because it specifically names the audience the business wants to reach. Think of it this way: if the market is everyone who might buy shoes, the target market is the particular group the company tailors its offering to—say serious runners who want high-performance features. The other terms refer to different ideas: market share is about how big a slice of the overall market a company captures; segment growth is about how fast a segment is expanding; brand equity is the value the brand holds in consumers’ minds.