Targeting customers based on their behavior like buying habits, income and locality etc comes under behavioral targeting. This can be seen in online advertising most commonly and Behavioral Targeting is one of the techniques used by Google today in its display ads.
You can better understand this by observing Google ads
on websites you visit. If you are a frequent visitor of Flipkart or some shopping websites, you can see more advertisements related to such websites with offers on particular products you visited mostly.
Or if you observe ads in Google search i.e. beside search results, they are closely related to the keywords you used in search bar. Google displays ads that are related to your keywords. For example, if you searched for MOTO G, Google displays ads related to MOTO G on Flipkart, eBay, Amazon with prices.
Google's bots sometimes called adware detects and keeps a record of your browsing behavior and uses it to display ads that you are interested in. obviously, such ads tempt you to click and sometimes make a purchase.
This can also be seen offline and companies track customer behavior by conducting surveys and collecting feedback at stores and some other methods. This kind of targeting is called behavioral targeting. Now, I hope you understood it clearly.