A Comprehensive Guide to Target Marketing

Target Marketing

Running a business in today’s competitive world is full of challenges. To excel in this cut-throat business environment, the brands need to identify the signs and make the right decisions. Identifying the right audience for a product or service is the first step towards success. The right audience, termed as "target market," is something that plays a pivotal role in determining a brand's success.

Target Market Definition

A target market refers to a certain group of potential customers to whom a company wants to sell its services and/or products. This group often includes specific customers to whom the company directs its marketing efforts. The target market is not dissociated from the total market for a certain product or service.

In a particular target market, the consumers share similar characteristics including demographics, income, buying habits, and location. In order to prepare an effective marketing plan, it is essential for businesses to identify their target market. Having no knowledge of the respective target market can result in a significant amount of loss of both time and money.

Types of Target Market

The target market for a product or service can be segmented on certain characteristics. So, before you learn about the different types of a target market, you need to know about different types of segmentation. The characteristics that help to identify the traditional market segments include:

Demographics
Psychographics
Behavioral activities
Technical knowledge
Benefits sought from the products/services
Usage and purchase situations

Based on these individual characteristics, the target market is classified in the following types.

Segmentation By Demography:

Age: Target market segmentation commonly occurs on the basis of age. If a company manufactures clothes for kids, they need a marketing strategy that appeals to the parents.

Gender: If a company wants to sell products to one gender, the target market will certainly consist of a singular gender, not both of them.

Income: Generally, a customer from a financially strong background doesn’t avail the same product or service as a customer with average income. Brands like Rolls Royce and Rolex have their target market based on income.

Race: Race can be a crucial factor in determining the target market. It has been noticed that the buying habits of American consumers are vastly different from Asian customers.

Religion: A target market can also be based on a particular religious group. At times, brands may need to segment their target market based on sub-religions as well.

Occupation: An occupation-based target market is also possible for certain products or services. For obvious reasons, the tools that are manufactured for gardeners cannot be targeted to surgeons.

Geographic location: A business needs to target its marketing efforts to the people of the location where the service or product is available. If a store advertises its services to the customers in a different country, it is not going to work.

Family size: Even the family size of the consumers can determine the target market for a service/product. Automobile companies do this very often to advertise their four-wheelers.

Segmentation By Psychography

Consumer Activity: Certain brands channel their marketing efforts to a target market where the consumers share similar activities. For instance, Adidas makes its products for the people who want to stay healthy.
Interests: People with same interests also make up a target market for certain products or services. For instance, some people are interested in collecting antiques. If a store sells antiques, it needs to address this target market.

Opinions: Consumers’ opinion is a crucial element that often is the sole reason for choosing a target market. Magazine companies do target the market that has interests in areas such as sports, entertainment, fitness, etc.

Segmentation By Brand Preference:

Brand Loyal Customers: There are people who are loyal to a certain brand. For instance, iPhone models have their separate consumer base. They fall under a target market that values brand name over other features.
Brand Aware Customers: Another customer base does not favor any brand. These customers are pretty much aware of the offerings made by a product or service. Brands need a separate approach to address this target market.
Unaware Customers: There is a major portion of the market that does not know anything about a particular brand. The brand does require a proper strategy to penetrate this sort of target market.

Segmentation By Product Usage:

Occasional Usage: Some products and services are meant for certain occasions. For instance, greeting cards are given to people during new years, birthdays and other occasions. Certainly, the target market is different.

Use on a Certain Situation: Some products are services are meant for certain situations. For instance, maternity clothes are for women who are expecting a baby soon. The target market is based on situational use.

Type of Use: Electronic products such as a printer or a desktop have their target market based on the type of use. There are different versions of the product based on usages such as the home version and the professional version.

A company needs to target a specific market with the desired positioning in mind. It is important to acknowledge that all brands cannot have the no.1 spot. However, being in the top 5 brands in the market for a certain target market is not a bad position to aim for. Once the target market is identified, a brand should focus on positioning and deciding future strategy based on the needs of the target market.

Marketing Mix – 4P’s in Target Marketing

The term “marketing mix” was first coined by E. Jerome McCarthy in 1960s. Since then it has been considered one of the fundamental elements of successful marketing efforts. The term refers to a particular set of actions or tactics that a company uses to promote its product or service in the market.

The 4Ps of marketing and the marketing mix are often used to express the same meaning. However, they are not the same thing. The 4Ps of marketing – product (or service), place, price, and promotion – help brands enhance the components of their marketing mix. Here are some questions that allow the brands to understand and define the 4Ps of marketing.

Product/Service:

What do the consumers want from the product or service? What requirements does it fulfill?
What features does the product or service have to fulfill those requirements?
Is there any feature that you have missed?
Are you including expensive features that the consumer will never use?
How and where the customer can use it?
What should be its physical features – colors, sizes, etc.?
What is it supposed to be called?
How the product or service is branded?
How the product or service is different from its competitors?

Place:

Where do the buyers usually look for a particular product or service?
In what type of store is the product or service available?
How do you plan to access the right distribution channels?
Is it necessary to use a sales force, make online submissions, send samples to catalogue companies, or attend trade fairs?
What tactics do your competitors perform? Is it possible to learn from them and still be different?

Price:

How much value does the product or service carry?
Is there any established price point for products or services in a particular area?
Is the target market price sensitive? Can a small dip in the price gain you better market share?
What kind of discounts should be given to trade customers or to other particular segments of the market?
Where does the price of the products stand in comparison to the competitors?

Promotion:

What is the ideal time and medium to get the marketing message across to your target market?
Will your message reach the target audience if you advertise online, in the press on television, on the radio, or on billboards? You can also frame the same question for other media such as direct marketing emails, public relation activities, and social media marketing.
Which is the best time to promote a product or service? Is there any seasonality in the target market? Do environmental issues influence the timing of your promotional activities?
Do the promotion tactics adopted by the competition have any influence over your choice of promotional activity?

Over the years, marketing experts have developed a number of marketing models. The 4Ps of marketing is just one of the many. However, when it comes to optimizing your marketing mix, the questions that are mentioned above are key to success.

Target Marketing Strategies: Find Your Niche Audience

The main object of evaluating a market segment is to identify one or more segments to enter. While selecting respective target markets, brands need to decide whether on a particular segment of the market or to serve the mass market. The choice a brand makes determines its marketing mix and positioning plank. Interestingly, businesses practice a number of strategies in today’s date to find their niche audience. However, most target marketing strategies revolve around these following tactics.

Undifferentiated Targeting:

In certain cases, there may be no strong differences in consumer characteristics. In those situations, developing a separate marketing mix for different segments may cost more than the potential gains. In the absence of segmentation, brands need to develop a single marketing mix for the total market.

Companies with this strategy assume that individual customers have similar needs that can be met with a common marketing mix. This strategy actually reduces production and marketing costs. Marketing costs are also lower as only one product needs to be promoted.

Differentiated Marketing or Multi-Segment Targeting:

Brands may be able to identify several potential target segments that can be served profitably. In such situations, the brands develop specific marketing mixes to cater to all or a few of those market segments.

The differentiated marketing strategy is considered to be the most sought after strategy as it has the potential to generate sales volume and high profits. However, it involves greater product design, production, inventory, promotion, marketing research, and higher management cost.

Focus or Concentrated Targeting:

When a brand identifies several market segments but still chooses to serve only one (or a few), this strategy becomes quite useful. The brand generally targets just one segment with one marketing mix. It analyses the needs and motive of the segment's customers and develops a specialized marketing mix.

Some companies have witnessed that concentrating resources towards a narrowly defined market segment is more profitable. This is convenient for companies with limited resources. Interestingly, focused marketing allows R&D expenditure to be concentrated on meeting the needs of one set of customers.

Customized Marketing:

In certain markets, the requirements of the customers are unique. Moreover, their purchasing power is sufficient to make separate marketing mixes for individual customers a viable option.

Brands using this strategy directly discuss their needs and design their services accordingly. Generally, there is a close relationship between the supplier and the customer.

A brand generally chooses the strategy that supports their vision. In certain cases, a company can use different strategies for different products and/or services. At the end of the day, it is the company that makes the final call.

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