How exactly could you go about targeting the local market? Approaching companies? Or some sort of offline marketing campaign (which would be quite costly).
Depends on the approach. You can get mailers designed and printed which are relatively inexpensive. Participating at local events (meetings, business organizations) are always good to do. Sponsorships are great too - think kids baseball and soccer teams that need shirts, equipment etc, or advertising directly at the various parks with a billboard.
Magazines are great. Penny Saver used to work in the California market but I haven't even seen it in Nebraska (maybe they don't print here). Any of your coffee/cafe type news pamphlets, church pamphlets, golf courses, theatre productions, highschool yearbook sponsorships. Heck, put a banner on your car (I have one, and you'd be amazed at how much business is driven from that for my wife's SEO Company).
There's so much that you can do for local advertising. The best one that I've ever done was working with a Golf Course. Keep in mind, golfers have disposable income. Sponsoring the score cards with your logo is a great way to get your image in-front of a captive audience for 4-6 hours. I've sponsored trash cans at the beach, cigar/cigarette cans on golf courses and everything in between.
As for expense, it's not expensive if you get the return on investment. This is why companies spend $3 million on a superbowl ad - they generate much more than that on the return! The same is true of your local community. Don't go cheap, you'll get cheap results.