Компании, торгующие на рынках конечных и организованных потребителей прекрасно осознают, что они не в состоянии привлечь сразу всех покупателей или, по крайней мере, не в состоянии привлечь всех покупателей одним и тем же способом. Покупателей много, они разобщены и весьма отличаются по своим потребностям и покупательскому опыту. Да и компании сильно различаются по своим возможностям в области обслуживания разных сегментов рынка. Вместо того чтобы пытаться конкурировать с другими, подчас очень сильными соперниками в пределах всего рынка в целом, каждая компания должна выбрать для себя те части рынка, которые она может обслуживать наилучшим образом. Таким образом, сегментацию можно рассматривать как некий компромисс между массовым маркетингом, предполагающим совершенно одинаковый подход ко всем потребителям, и допущением, что маркетинг должен проявлять индивидуальный подход буквально к каждому человеку.

Сегментирование рынка – выделение в пределах рынка четко обозначенных групп потребителей, различающихся по своим потребностям, характеристикам или поведению, для обслуживания которых могут потребоваться определенные товары или маркетинговые комплексы.

Рыночный сегмент – это группа потребителей, характеризующаяся однотипной реакцией на предлагаемые продукты и на набор маркетинговых стимулов.

Сегментирование может проводиться на нескольких различных уровнях.

Компании могут вообще не сегментировать рынок (массовый маркетинг), проводить полное сегментирование (микромаркетинг) или сегментировать рынок на некотором промежуточном уровне (сегментированный маркетинг или маркетинг, ориентированный на выбор ниш).

1. Массовый маркетинг- использование по существу одного и того же товара, методов стимулирования и распределения безотносительно к специфическим нуждам потребителей. Вследствие многих факторов использование массового маркетинга сейчас стало затруднительным.

Компании не всегда использовали целевой маркетинг. Фактически весь XX век большинство компаний, производящих потребительские товары, предпочитали массовый маркетинг. При массовом маркетинге продавец занимается массовым производством, массовым распределением и массовым стимулированием сбыта одного и того же товара для всех покупателей сразу. В свое время фирма «Кока-кола» выпускала всего один напиток для всего рынка в надежде, что он придется по вкусу всем. Основной довод в пользу массового маркетинга заключается в том, что при подобном подходе должны максимально снизиться издержки производства и цены и сформироваться макси­мально большой потенциальный рынок.

2. Сегментированный маркетинг – формирование компанией предложений товаров и услуг, в значительной мере приспособленных к специфическим нуждам потребителей, относящихся к одному или нескольким сегментам рынка.

Знаменитый отели Hilton обслуживают целый ряд разнообразных рыночных сегментов – бизнесменов, совершающих деловые поездки, людей, путешествующих семьями, и т.п. – для нужд каждой группы разработаны соответствующие комплексы услуг.

По сравнению с массовым маркетингом сегментированный маркетинг предоставляет потребителям дополнительные выгоды. Компания будет эффективнее работать на рынке, ориентируя свои товары или услуги, каналы распространения и программы взаимодействия с потребителями только на тех потребителей, которых она может лучше всего обслужить. Кроме того, компания может столкнуться с меньшим количеством конкурентов, если на данном рыночном сегменте сфокусировало свое внимание меньшее число других компаний.

3. Маркетинг на уровне рыночных ниш – формирование компанией товаров и услуг, в значительной мере приспособленных к специфическим нуждам потребителей одного или нескольких подсегментов рынка, зачастую характеризующихся меньшим уровнем конкуренции.

Ниша – это узко определенная группа потребителей, обычно получаемая в результате разделения сегментов на подсегменты или выделения групп потребителей с отчетливо выраженными особенностями.

Например, на рынке автомобилей можно выделить такие сегменты, как покупатели роскошных автомобилей, покупатели автомобилей с высокими эксплуатационными характеристиками, покупатели практичных автомобилей и покупатели экономичных автомобилей. Сегмент практичных автомобилей может включать легкие грузовики и «внедорожные» средства передвижения. В свою очередь, подсегмент «внедорожных» автомобилей можно дальше подразделить на сегмент утилитарных автомобилей (LandRover) и ниши легких спортивных практичных автомобилей (Suzuki) и роскошных спортивных практичных автомобилей (RangeRover и Lexus).

Предполагается, что компании, действующие в нишах, настолько глубоко понимают и умеют удовлетворять нужды потребности представителей своей ниши, что потребители охотно готовы платить за товары и услуги компании за более высокую цену. Например, фирма, Ferrari назначает очень высокие цены на свои автомобили, потому что верные ей покупатели считают, что никакие другие автомобили не смогут обеспечить им такого сочетания качества товара, уровня обслуживания и чувства соучастия компании в их проблемах, как Ferrari.

Например, фирма Nike выпускает спортивные принадлежности для занятий баскетболом, легкой атлетикой и футболом, но, кроме того, и для меньших ниш: велосипедного спорта и уличного хоккея.

4. Микромаркетинг – форма целевого маркетинга, при которой компании ориентирует свои маркетинговые программы на нужды и потребности четко определенных и достаточно узких географических, демографических, психографических и поведенческих сегментов.

Микромаркетинг включает локальный маркетинг и индивидуальный маркетинг.

Локальный маркетинг подразумевает специальный подбор торговых марок и проведение стимулирования сбыта таким образом, чтобы он соответствовал нуждам и потребностям локальных потребительских групп, в которые входят жители какой-нибудь местности – городов, районов, микрорайонов и даже покупатели, посещающие отдельные магазины.

Компания Kraft подбирает для каждого из магазинов своей сети определенный ассортимент сыров и так размещает их на полках, чтобы оптимизировать продажу сыра в магазинах, посещаемых покупателями с низкими, средними и высокими доходами, а также в магазинах микрорайонов, населенных разными этническими группами.

В своей крайней форме микромаркетинг превращается в индивидуальный маркетинг – приспособление товарного ассортимента и маркетинговых программ к нуждам и предпочтениям отдельных потребителей. Индивидуальный маркетинг также называют «маркетингом рынков-для-одного-потребителя», «маркетингом под заказ» и «маркетингом с глазу на глаз».

Массовый маркетинг в пору расцвета игнорировал то, что веками потребители обслуживались на индивидуальной основе: портной на заказ шил костюм, сапожник по индивидуальному заказу тачал обувь и т.д. Сегодня, тем не менее, новые технологии позволяют многим компаниям вернуться к маркетингу «под заказ». Более мощные компьютеры, содержащие детализированную информацию в базах данных, роботизированное производство, а также быстродействующие и работающие в интерактивном режиме средства коммуникации, электронная почта, факс и Internet, объединяясь, благоприятствуют «массовому обслуживанию на индивидуальной основе».

Массовое обслуживание на индивидуальной основе – это возможность в массовых масштабах создавать товары и средства коммуникации с потребителями, разработанные на индивидуальной основе таким образом, чтобы удовлетворить требования каждого конкретного потребителя.

Основные этапы целевого маркетинга

1 этап – Сегментирование рынка:

— определение критериев и принципов сегментирования;

— составление профиля каждого из полученных сегментов.

Для сегментирования рынка и составления профиля каждого из полученных сегментов компания может использовать разные методы.

2 этап – Выбор целевого сегмента рынка:

— оценка степени привлекательности полученных сегментов;

— выбор одного или нескольких целевых сегментов.

3 этап – Позиционирование товара на рынке:

— разработка подхода к позиционированию в каждом из целевых сегментов;

— разработка маркетингового комплекса для каждого целевого сегмента.

90000 Target Market Segment Strategy | Small Business 90001 90002 Consumers are people, and marketers have long-since recognized that they are not all alike. They differ in terms of location, age, gender, attitudes, needs and social affiliations. Segmentation and targeting is the science — some would say the art — of placing consumers into groups based on these characteristics. Companies use segmentation and targeting to promote their products, services or brands effectively. 90003 90004 What’s a Target Market? 90005 90002 In an ideal world, a business would sell its products to everyone, but that’s unrealistic.A business that sells expensive Iranian caviar is not going to attract low-income consumers, for example, and a retired couple will not be interested in a range of organic diapers. Because of this, businesses seek to identify the specific group of people or businesses they hope to sell their products to. This group of people is called the target market. 90003 90002 Examples of target markets include: 90003 90010 90011 Mothers of school-aged children 90012 90011 Affluent seniors who own their own homes 90012 90011 Law firms in Texas 90012 90011 Single millennials 90012 90019 90020 Target Markets Resemble a Big Lake 90005 90002 Target markets are like a big lake.Potentially, there are plenty of fish to catch in the lake, but it takes a lot of effort. You need a different type of lure to catch each type of fish. To put that in marketing terms, some customers will respond to your advertising while others will be indifferent to it or even be repelled by it. That’s because the people are individuals, and target markets are too large for everyone in them to be motivated by the same things. 90003 90024 Enter the Segmentation Strategy 90005 90002 In business, it’s critical that you persuasively communicate your marketing messages.To do that, you need to be able to adapt your messaging so that it appeals to the consumer’s needs, wants and values. The smaller and more homogeneous your target market, the more likely it is that everyone within that market will respond to the same messaging. 90003 90002 Market segmentation is the act of dividing a large target market into distinct groups of consumers who have similar characteristics, needs or behaviors. For example, instead of targeting law firms in Texas, you might break that down to 90029 law firms in Texas who have a minimum annual turnover of $ 2.5 million and who specialize in divorce law. 90030 90003 90002 This process is called segmentation because you’re splitting the large target market into smaller segments, like an orange. 90003 90034 Why Use Target Marketing Strategies? 90005 90002 For marketers, segmentation is invaluable because it: 90003 90010 90011 Prompts you to create new products based on the exact wants and needs of the consumer segment 90012 90011 Gives a better understanding of the target audience and thus makes the company’s marketing more effective 90012 90011 Uses the marketing budget strategically or reduces it, because the messaging is specific 90012 90011 Puts the consumer first, which is a sure-fire way to attract and retain loyal customers and gain an advantage over competitors 90012 90019 90048 The Four Types of Target Market Segmentation 90005 90002 The purpose of market segmentation is to group all the types of fish (consumers) in your big lake that share the same values ​​and purchasing behaviors.The starting point, then, is to figure out what the category areas or segments should be. There’s no need to reinvent the wheel here, as marketers traditionally rely on the following four segmentation strategies: 90003 90010 90011 90054 Demographic 90055 segmentation 90012 90011 90054 Geographic 90055 segmentation 90012 90011 90054 Behavioral 90055 segmentation 90012 90011 90054 Psychographic 90055 segmentation 90012 90019 90002 Look at each segment in turn. 90003 90072 Demographic Segmentation Examples 90005 90002 Demographics identifies potential customers by criteria such as age, gender, family size, family life cycle, income, education, religion, race, social class and nationality.It’s the most commonly used market segment because these variables are easy to identify and measure. Drilling down a bit further: 90003 90002 90054 Age and life-cycle segmentation 90055 addresses the fact that a person’s needs and wants change with age and the stage they are at in their life. For example, a 25-year-old single woman is likely to purchase more disposable fashion items than a 50-year-old mother of three who has other economic obligations. 90003 90002 90054 Gender segmentation 90055 acknowledges the fact the men and women often have different attitudes toward a product.For example, Nike realized that performance for men is about sports, whereas for women it is about how fitness fits in with their overall lifestyles. 90003 90002 90054 Income and social class segmentation 90055 makes sense on the surface because certain products such as financial services, luxury goods and travel are more affordable to higher-income consumers. However, it’s fair to say that income does not always predict a consumer’s buying behavior because people prioritize their money differently, and aspirations must be taken into account.90003 90088 Geographic Segmentation Examples 90005 90002 Geographic segmentation divides consumers into segments based on where they live. You can go as deep as you want here, dividing people by nation, state, region, county, city or neighborhood. 90003 90002 Geographic segmentation recognizes that people are influenced by the places they live and work. These differences may be cultural. For example, in China, it is common to give gifts to your visitors. Elsewhere, differences may be traditional or political.90003 90002 What’s interesting about geographic segmentation is that, while it’s effective as a market differentiator, its predictive power may be waning, especially for companies that do business internationally. Assuming that geography determines a person’s spending power or social class is a false assumption in today’s increasingly globalized world. 90003 90002 Thus, global marketers tend to combine geographic segmentation with demographic segmentation — a practice known as 90054 geodemographics 90055 — to study the target group of customers in the places where they live.90003 90100 Behavioral Segmentation Examples 90005 90002 Behavioral segmentation is based on consumers ‘attitudes toward a product and how they use it. Are they the first people to buy new gadgets or do they wait until a product has gone mainstream before they invest? Do they prefer established brands over cheaper alternatives? Because behavior toward a product is fairly tricky to pin down, many marketers focus on the following variables as the best starting points: 90003 90002 90054 Occasions 90055: People buy certain products at different times of the day, month or year, so it’s worth looking at when they get the idea to buy, make the purchase or use the purchased item.A good example is flower bouquets, which consumers tend to purchase around Mother’s Day and Valentine’s Day. Running campaigns around these times should target as many 90029 occasions 90030 customers as possible. 90003 90002 90054 Benefits 90055: Benefit segmentation identifies what people look for in the products they buy. For instance, one consumer group may buy a car for its fuel efficiency and performance, whereas another group may buy the same car for its stylish interior, which they perceive as high quality.90003 90002 90054 Usage rate 90055: Usage rate segmentation identifies how often someone uses a product, whether they are light, medium or heavy users. Marketers may plan to target heavy users because this group accounts for a high percentage of the total buying. Alternatively, they might focus on turning light users into heavy users as an area for business expansion. 90003 90002 90054 Brand loyalty 90055: Some consumers, known as hard-core 90029 loyals 90030, remain loyal by buying the same products.Others are loyal toward two or three brands and randomly alternate between them. A final group show no loyalty to brands whatsoever and is influenced by other factors, such as price. 90003 90124 Psychographic Segmentation Examples 90005 90002 Psychographic segmentation is the hardest segment to analyze because it is tied to two fairly private variables: personality profiles and lifestyle profiles. Psychographic segmentation asks such questions as: Does this consumer live in the moment or does he keep one eye on the future? Is she an extrovert or an introvert? How politically active is he? What are her interests and hobbies? 90003 90002 As you can see, this category covers a huge area.Grouping people by hobbies alone has the power to find consumers who enjoy spectator sports, care about the environment, vote Democratic, read biographies, fix old cars, go to parties or eat vegan food for health reasons. 90003 90002 Since many of these preferences are not visible, uncovering them requires down-and-dirty market research such as attitudinal surveys and interviews or the use of marketing artificial intelligence — that’s big data — to guess people’s lifestyles and personalities based on the websites they visit, their Facebook posts and similar information.90003 90002 This research may be more prone to error that hard facts such as a person’s age or ZIP code, but for small budgets, it’s typically better than taking a stab in the dark. 90003 90134 The T of STP Marketing 90005 90002 Segmentation, which is the 90054 S 90055 in the marketing model known as 90054 STP marketing 90055, is a popular model that marketers use when planning the type of messages that will appeal to different audiences. The second stage of the model is 90054 T 90055 for 90054 Targeting 90055.After you have identified a number of segments, you must decide which and how many segments you’re going to market to. 90003 90002 For most marketers, the decision comes down to four factors: 90003 90002 90054 Size 90055: The segment must be large enough to justify marketing to it. If the target segment is small, you risk limiting the company’s growth. 90003 90002 90054 Difference 90055: Measurable differences must exist between the segments. Each segment must need different benefits from the product.Think about the previous example of potential car buyers; some need to know that the car is fuel-efficient and wallet-friendly, whereas others want to experience a smooth and luxurious drive. 90003 90002 90054 Accessible 90055: You must be able to reach the segment with your marketing messages. 90003 90002 90054 Money 90055: The money you make from targeting the market segment must exceed the cost of delivering multiple marketing plans. Bear in mind that: 90003 90010 90011 A 90054 multi-segment strategy 90055, where you approach several market segments with a different product or marketing message, means greater overall marketing costs.90012 90011 A 90054 single-segment strategy 90055 that involves going after a larger share of just one segment may be more effective due to a greater knowledge of the customers ‘needs within the target segment. It’s a high-risk strategy, however, since your business could suffer if the segment turns sour. 90012 90019 90174 Understanding Product Positioning 90005 90002 The final step of STP customer segmentation models, 90054 P 90055, deals with 90054 positioning 90055. Positioning is concerned with the exact messages you put out and how you transmit those messages to give your target segments a reason to buy.90003 90002 Positioning is where the rubber hits the road. Specifically, you’re looking at the wants and needs of each segment and creating a value proposition that clearly explains how your product can meet those needs better than the products of your competitors. 90003 90002 For example, suppose you run an adventure travel company. Through segmenting, you’ve identified your target customer as unmarried, aged between 18 and 26, extroverted, pre-career, budget-conscious and committed to responsible travel.90003 90002 One approach might be to run a best-travel-photo competition on Instagram (because your audience favors this channel) with the winner receiving an all-inclusive eco-travel trip (because your audience loves getting free stuff). The hope is for the competition to attract many thousands of entries, which represents a cost-effective way for the company to build its mailing list of hyper-targeted customers. 90003.90000 Target Market Segmentation: How to Use it use your Advantage 90001
90002 90003 Defining Target Market Segmentation 90004 90005

90006 Market segmentation, or audience segmentation, is the practice of dividing potential customers into meaningful subgroups based on their characteristics and preferences. 90007

90006 Marketing content can then be tailored to these segments, helping to create a more efficient and cost effective marketing strategy. 90007

90002 90011 Why it Matters 90012 90005

90006 Brand loyalty matters to today’s consumers, but a large number of brands are still failing to tap into what drives this level of commitment.90007

90016 90006 It all comes down to understanding what consumers want, which varies from person to person. Brand messaging should cater for this. 90007 90019

90006 Casting aside the one-size-fits-all mentality and placing audience interests at the core of your brand’s content results in hyper-targeted products and messages. 90007

90002 90011 Four Segmentation Criteria 90012 90005

90006 Audiences are traditionally divided using 4 main criteria. 90007

90006 Within each of those, further divisions can be made for a more granular understanding of a market.90007

90006 90011 Behavioral 90012 — Consumer interactions with products and brands. This can include how and where they engage with brands, their social media usage, and online consumer journey. 90007

90006 90011 Demographic 90012 — Criteria includes gender, age, income, education, social class, religion and nationality. 90007

90006 90011 Geographic — 90012 Information on where they live. This can be subdivided by nation, state, town and so on. 90007

90006 90011 Psychographic 90012 — This can include personality variables such as introvertedness and extrovertedness, lifestyles and attitudes to life.90007

90002 90011 A Step-by-Step Guide to Market Segmentation 90012 90005

90006 A target market analysis will help you identify exactly which groups of people you should be speaking to. 90007

90052 90011 Step 1. Gather recent, reliable data. 90012 90055

90006 Third party data sources are hugely valuable in helping you build that real-life picture of your industry, market segment, competition and potential customer base. 90007

90006 But knowing what data you need to gather is a familiar challenge.90007

90006 With consumer and industry trends evolving so fast, one key thing to consider is how recent and reliable the data you’re gathering is. 90007

90006 With a platform like GlobalWebIndex that’s updated quarterly, you can ensure the data you’re looking at is up-to-date, fresh, and highly relevant. 90007

90052 90011 Step 2. Divide your market. 90012 90055

90006 People who are attracted to your product or service often share certain characteristics, and identifying these will help you create your target market segments and refine your messaging for each.90007

90006 Ask questions like: 90007

90072 90073 What defines this particular group of people? 90074 90073 What do they have in common? 90074 90073 How do they go about researching products? 90074 90073 Which touchpoints matter most? 90074 90081

90006 Creating customer profiles or personas that pull together these shared traits will help you hone in on what matters, identifying patterns, trends and insights that will spark ideas, bringing in high-value customers. 90007

90052 90011 Step 3.Know your competitors. 90012 90055

90006 Understanding the competition in the market is key. This will tell you exactly what your product or service is up against, and what tactics you need to take on to compete. 90007

90006 Ask questions like: 90007

90072 90073 How many businesses have a comparable offering to you? 90074 90073 What’s their pricing structure? 90074 90073 What reach do they have? 90074 90073 Who do they appeal to most? 90074 90081

90006 You may find that one group of people is very well served by competitors while another group has yet to be tapped into.90007

90006 This will help you identify the most profitable group to target in your marketing plans, as well as identify what types of marketing communications may or may not have worked prior. 90007

90052 90011 Step 4. Integrate your analysis in your business plan. 90012 90055

90006 Once you’ve completed your market analysis and identified the audiences with the most potential, it’s essential to incorporate these different target market segments into your wider business plan. 90007

90006 This will enable you to make predictions about who will buy your new product, in what quantities and how often, as well as identifying any possible peaks or troughs in demand.90007

90006 Understanding the data set and variables that differentiate one group of people from another is key to knowing your market. 90007

90006 Look at previous customer data, whether specific groups have different needs, or how their attitudes or lifestyles differ. 90007

90006 This will help you understand their specific behaviors, alongside demographic and life stage information of your target market segments, enabling you to craft the right marketing messages and identify the best channels and tactics to use for a high value campaign.90007

90002 Building Up the Picture One Question at a Time 90005

90006 Let’s take a hypothetical example. 90007

90006 Say you own a brand selling healthy packaged sandwiches through retailers. 90007

90006 From your demographic and geographic research, you’ve segmented your audience into two key markets: students and young professionals. 90007

90006 Now you want to increase brand awareness amongst the student market so they pick your sandwich off the shelf. 90007

90006 But in order to reach them effectively, you need to understand their behaviors and attitudes — namely how, where and why they consume content.90007

90006 Using third party data, it’s possible to reveal the answers to these questions to build a detailed picture of their media usage and online behaviors. 90007

90006 With this insight alone, you know that students are spending a considerable amount of time on social media daily. The next step is understanding how and why they do so. 90007

90006 Incrementally and methodically combining data in this way will help you establish what types of content will resonate with your separate audiences and where’s best to place it.90007

90002 90011 Target Segmentation in Action: Visit Scotland 90012 90005

90006 In 2006, Visit Scotland conducted a large-scale consumer research programme that led them to the discovery of five core audience segments: adventure seekers, curious travellers, engaged sightseers, food loving culturalists and natural advocates. 90007

90006 Each segment was defined by factors including personality, interests, age, what they look for in a holiday, accommodation preferences, the activities they enjoy and how they use technology.90007

90016 90006 The target market segmentation approach also identifies the key challenge of marketing messaging to each group. 90007 90019

90006 For example, curious travellers generally ‘dislike returning to the same place more than once’. 90007

90006 These insights give Visit Scotland a clear focus for their messaging, enabling them to target customers and start to build customer relationships based on their individual preferences. 90007

90002 90011 Incorporating Target Market Segmentation into your Marketing Strategy 90012 90005

90006 Target market segmentation should underpin your brand’s marketing approaches and strategy, helping you set objectives and form ideas in the most audience-centric way possible.90007

90006 Equipped with a better understanding your target audience, and being able to divide this knowledge into meaningful and distinct groups, different audiences based on individual preferences means you know what they want, when and where they want it. 90007

90016 90006 This increased relevance ensures your marketing campaigns are tailored to your audience for maximum impact. 90007 90019

90006 This translates into numerous business benefits, from more intelligent marketing spend to increased sales and greater loyalty, all of which contribute to a healthier ROI and customer value.90167 90007

90169
.90000 Market Targeting — Targeting Market Segments effectively 90001 90002 We have learnt in the section Market Segmentation that a company can not serve all consumers in the total market. Their variety and that of their needs is simply too large. Therefore, we have segmented the market, by dividing it up into small segments. Now, we should target those segments we can serve most efficiently and effectively: Market Targeting. This is the second step of setting up a marketing strategy. 90003 90002 Market Segmentation, Market Targeting, Positioning and Differentiation — necessary for an integrated Marketing Strategy.90003 90002 After having distinguished between the separate segments in a market, the company can select one or more of these segments to enter. Before doing this blindly, each segment should be assessed. Therefore, targeting is concerned with evaluating each segment’s attractiveness for the company and selecting one or more segments to enter. The evaluation of segments is based on the question which segment the company can serve best. In other words, we should concentrate on and enter those segments in which we can generate the greatest customer value over time.90003 90002 Whether a company decides to enter one or more segments may also depend on its resources. If these are limited, it may be better served to focus on one or a few smaller segments, which we call market niches. In the best case, the company should look for segments competitors overlook or ignore. Alternatively, a company can decide to enter several segments. This may be based on a strong relation between the segment in terms of resembling needs, or on the company’s widespread resources.For instance, clothing companies often target more than only one segment: males, females, children and so on. A large company such as a major car manufacturer might even decide serve all market segments by offering a complete range of products. 90003 90010 90011 The Market Targeting Process 90012 90013 90002 We will now look at the process of Market Targeting in two simple steps. Firstly, we have to evaluate the market segments. Then, we select target market segments. This last step goes in hand in hand with choosing the targeting strategy.90003 90002 Market Targeting in two simple steps 90003 90018 90011 Evaluating Market Segments — Step one of Market Targeting 90012 90021 90002 As said, we start with the market targeting process by assessing the different segments we identified in the market segmentation. But based on which criteria do we evaluate the segments? In assessing market segments, a firm should consider three factors. These are: 90003 90024 90025 The segment size and growth 90026 90025 The segment structural attractiveness 90026 90025 The company objectives and resources.90026 90031 90002 In order to evaluate segments, the company needs to collect and analyse relevant data first. This data may include information on current segment sales, growth rates and anticipated profitability of segments. But even if we have these data, what is the right size and the right growth for our company? The largest or fastest-growing ones? Or small niche segments? There is no answer that applies to every company. In fact, it depends on the company itself. Therefore, the company objectives and resources are as important as the segment size, growth, or structural attractiveness.A smaller company could lack the skills and resources necessary to serve a large segment. Or such a small company might find that segment too competitive, not fitting its strategy. Therefore, some companies will focus on small segments that might appear less attractive to outsider. For the company, though, it may be a more attractive and profitable choice. 90003 90002 In addition to the segment size and growth, its structural attractiveness plays a significant role in market targeting. The major structural factors that are meant here affect the segment’s long-term attractiveness.These structural factors are nothing else than the 5 Forces of Porter. With the 5 Forces model, the attractiveness of a market based on five factors can be assessed. Applied to market targeting, we firstly look at the competitors that are present in the segment. Clearly, a segment is less attractive if it already contains a high number of strong or aggressive competitors. In addition to competition, the existence of substitute products is important. The threat of substitution could limit prices and the profits we can earn in the segment.The bargaining power of buyers is also an influencing factor on the segment’s attractiveness. If their bargaining power is large, they may force the company to lower prices, offer more they might set competitors against one another — obviously not a favourable situation. Finally, the power of suppliers affects the segment’s attractiveness, since powerful suppliers could control prices, quality and quantity of the goods we need. 90003 90002 The Five Forces of Porter — Useful for Market Targeting 90003 90002 Certainly, a favourable size, growth and structural attractiveness of a segment is not all in market targeting.It has to match the company’s own objectives and resources. If it does not fit the company’s long-term objectives, why should we enter it? We might also lack the skills and resources that are required to succeed in a segment, even if it is attractive. An example: the economy segment of the automotive market is quite strongly growing. Nevertheless, it would not make that much sense for a company such as Ferrari to enter this segment. The reason simply is that the company would not be able to create superior customer value in this segment.Instead, it will be much more profitable for the company to focus on segments that meet its objectives and strategy. 90003 90018 90011 Selecting Target Market Segments — Step two of Market Targeting 90012 90021 90002 After having assessed the identified market segments, we can now go on with selecting the most profitable ones for the company. First of all, what is a target market? It refers to one set of buyers who share common needs or characteristics the firm decides to serve. So, the company has to decide which and how many segments it will target.Thus, we arrive at the actual core activity of market targeting. Market targeting can take different forms. These are referred to as levels of market targeting. A firm can target very broadly, which is called undifferentiated marketing. Market targeting can also be very narrow, which is called micromarketing. If it is somewhere in between, it might be differentiated or concentrated market targeting. 90003 90002 We will now look at these four different market targeting strategies that go hand in hand with the segments we choose.90003 90002 Four Market Targeting Strategies 90003 90018 90011 Undifferentiated (Mass) Marketing — Broad Market Targeting 90012 90021 90002 If we look at the whole market as a pie, following the undifferentiated market targeting strategy, we would focus on the whole pie. We would not select the slice that appears to be most delicious, but try to eat all of them. Thus, there is actually no targeting at all. 90003 90002 Following an undifferentiated (mass) market targeting strategy, the company decides to ignore differences between market segments and to focus on the whole market with one offer.Therefore, the firm has to focus on what the whole market has in common in terms of the needs of consumers, rather than focusing on what is different. Since the company wants to address the whole market, it needs to design a product and a marketing programme that will meet the needs of and appeal to the largest possible number of buyers. 90003 90002 There might be some doubts whether this market targeting strategy is the right one. Certainly, difficulties can arise in developing a product that is capable of satisfying all consumers.In addition, companies that follow this strategy often struggle to compete with those companies that pursue a more focused strategy. Those focused companies simply do a better job at satisfying the unique needs of specific segments and niches, whose presence can not be denied. 90003 90018 90011 Differentiated (Segmented) Market Targeting 90012 90021 90002 A differentiated market targeting strategy means that we decide to target several market segments and also design separate offers for each.To return to our previous example, the pie, we would now select the most delicious ones and focus on eating these. 90003 90002 Most large companies follow the differentiated market targeting strategy. For instance, a car company produces several different models of cars, and often even offers different brands. Fiat, for example, consists of more than the core brand Fiat. Think of Ferrari, Alfa Romeo and Lancia. Each brand targets its own segment of car buyers. P & G, to give another example, markets more than one detergent brand, each targeting a different segment.Thus, we select several segments to serve and design separate offers for each. 90003 90002 The reason of pursuing this market targeting strategy is that higher sales and a stronger position within each segment can be the consequence. Certainly, a strong position within several segments generates higher total sales than an undifferentiated marketing across all segments. However, differentiated market targeting strategies also increase costs. These come from the fact that different offerings have to be developed for each segment.Instead of producing one product 10,000 times, the company has to produce 10 products 1,000 times each. Also, the development of separate marketing plans for each segment involves additional research, analysis, planning and forecasting. Consequently, the company should weigh increased costs against the benefits when deciding on a differentiated market targeting strategy. 90003 90018 90011 Concentrated (Niche) Market Targeting 90012 90021 90002 To stay with our example: If we do not want to eat the whole pie, neither several slices, but only one small slice that has a special criterion others do not have such as a nut on top, we go for the concentrated (niche) market targeting strategy.90003 90002 Following the concentrated market targeting strategy, the company focuses on one or a few segments or niches in a market. The aim is then to reach a large share in this segment or niche, instead of going after a small share of a large market. 90003 90002 Why should a company do so? Clearly it will be able to achieve a stronger market position in the chosen segment because its knowledge of the consumer needs in the niche is larger. Also, it may acquire a special reputation for delivering exactly what the consumer wants in that niche.The company can fine-tune its products, marketing programmes and prices to the specific needs of consumers in the niche. Therefore, its marketing becomes more effective. But marketing may also become more efficient, because the company can tailor its offerings, channels and programmes to the needs of those consumers it can serve best and most profitably. 90003 90002 The difference between a niche and a segment is the size. While a segment is rather large and will in most cases attract several competitors, a niche is quite small and may be focused on by few competitors only.Niching thus allows especially small companies to focus their limited resources on serving niches. The key is to find those niches that are overlooked by larger competitors. 90003 90018 90011 Micromarketing — Narrow Market Targeting 90012 90021 90002 In our example, micromarketing would mean to eat the nut on the already special slice only. 90087 In fact, micromarketing means nothing else than tailoring the marketing programmes and products to the needs and wants of individual consumers or local customer segments.This is the narrowest market targeting strategy possible. Instead of seeing a customer in every individual, we see the individual in every customer. We can tailor our products and programmes to suit the tastes of specific locations of specific individuals. Therefore, micromarketing can take the form of local marketing and individual marketing. 90003 90002 Under the local marketing strategy, we tailor brands and promotions to the specific needs and wants of groups of local customers. These may be cities, neighbourhoods etc.90003 90002 The most extreme market targeting strategy option is individual marketing. Then, we tailor our marketing programmes and products to the needs of individual customers. This is also called one-to-one marketing, markets-of-one marketing and mass customisation. Today, this customisation for individual customers is facilitated by new technologies, such as databases, robotic production and flexible manufacturing. 90003 90002 In micromarketing, relationships with the few customers the company focuses on is of utmost importance.The company can simply not afford to lose one of the few, but highly profitable customers. 90003 90010 90011 Factors influencing the Choice of the Market Targeting Strategy 90012 90013 90002 Which market targeting strategy is chosen depends on many factors. None of the strategies above works best in every situation. Rather, the market targeting strategy depends on several characteristics of the company. When choosing a market targeting strategy, the company should consider: 90003 90024 90025 90011 The company’s resources.90012 If resources are limited, a concentrated market targeting strategy might make more sense. 90026 90025 90011 The degree of product variability. 90012 In case of uniform products, such as apples or steel, undifferentiated marketing may be more suited. In case of products that can vary in design (cars, cameras etc.), more narrow differentiation and concentration is suitable. 90026 90025 90011 The product life cycle. 90012 When a company introduces a new product, it may be helpful to launch only one version.Undifferentiated or concentrated marketing might make most sense. In the mature stage, a segmented market targeting may be appropriate. 90026 90025 90011 Market variability. 90012 If you talk about a kind of product where all buyers have the same tastes, buy the same amounts etc., undifferentiated marketing makes sense. 90026 90025 90011 Competitors ‘marketing strategies. 90012 If competitors apply differentiated or concentrated market targeting strategies, using undifferentiated marketing may prove to be fatal.However, the firm might also gain an advantage by using a different market targeting strategy than competitors, especially if it can serve individual customers better by meeting their needs. Then, a concentrated market targeting strategy or micromarketing will work best. 90026 90031.90000 Market Targeting — Targeting Market Segments effectively 90001 90002 We have learnt in the section Market Segmentation that a company can not serve all consumers in the total market. Their variety and that of their needs is simply too large. Therefore, we have segmented the market, by dividing it up into small segments. Now, we should target those segments we can serve most efficiently and effectively: Market Targeting. This is the second step of setting up a marketing strategy. 90003 90002 Market Segmentation, Market Targeting, Positioning and Differentiation — necessary for an integrated Marketing Strategy.90003 90002 After having distinguished between the separate segments in a market, the company can select one or more of these segments to enter. Before doing this blindly, each segment should be assessed. Therefore, targeting is concerned with evaluating each segment’s attractiveness for the company and selecting one or more segments to enter. The evaluation of segments is based on the question which segment the company can serve best. In other words, we should concentrate on and enter those segments in which we can generate the greatest customer value over time.90003 90002 Whether a company decides to enter one or more segments may also depend on its resources. If these are limited, it may be better served to focus on one or a few smaller segments, which we call market niches. In the best case, the company should look for segments competitors overlook or ignore. Alternatively, a company can decide to enter several segments. This may be based on a strong relation between the segment in terms of resembling needs, or on the company’s widespread resources.For instance, clothing companies often target more than only one segment: males, females, children and so on. A large company such as a major car manufacturer might even decide serve all market segments by offering a complete range of products. 90003 90010 90011 The Market Targeting Process 90012 90013 90002 We will now look at the process of Market Targeting in two simple steps. Firstly, we have to evaluate the market segments. Then, we select target market segments. This last step goes in hand in hand with choosing the targeting strategy.90003 90002 Market Targeting in two simple steps 90003 90018 90011 Evaluating Market Segments — Step one of Market Targeting 90012 90021 90002 As said, we start with the market targeting process by assessing the different segments we identified in the market segmentation. But based on which criteria do we evaluate the segments? In assessing market segments, a firm should consider three factors. These are: 90003 90024 90025 The segment size and growth 90026 90025 The segment structural attractiveness 90026 90025 The company objectives and resources.90026 90031 90002 In order to evaluate segments, the company needs to collect and analyse relevant data first. This data may include information on current segment sales, growth rates and anticipated profitability of segments. But even if we have these data, what is the right size and the right growth for our company? The largest or fastest-growing ones? Or small niche segments? There is no answer that applies to every company. In fact, it depends on the company itself. Therefore, the company objectives and resources are as important as the segment size, growth, or structural attractiveness.A smaller company could lack the skills and resources necessary to serve a large segment. Or such a small company might find that segment too competitive, not fitting its strategy. Therefore, some companies will focus on small segments that might appear less attractive to outsider. For the company, though, it may be a more attractive and profitable choice. 90003 90002 In addition to the segment size and growth, its structural attractiveness plays a significant role in market targeting. The major structural factors that are meant here affect the segment’s long-term attractiveness.These structural factors are nothing else than the 5 Forces of Porter. With the 5 Forces model, the attractiveness of a market based on five factors can be assessed. Applied to market targeting, we firstly look at the competitors that are present in the segment. Clearly, a segment is less attractive if it already contains a high number of strong or aggressive competitors. In addition to competition, the existence of substitute products is important. The threat of substitution could limit prices and the profits we can earn in the segment.The bargaining power of buyers is also an influencing factor on the segment’s attractiveness. If their bargaining power is large, they may force the company to lower prices, offer more they might set competitors against one another — obviously not a favourable situation. Finally, the power of suppliers affects the segment’s attractiveness, since powerful suppliers could control prices, quality and quantity of the goods we need. 90003 90002 The Five Forces of Porter — Useful for Market Targeting 90003 90002 Certainly, a favourable size, growth and structural attractiveness of a segment is not all in market targeting.It has to match the company’s own objectives and resources. If it does not fit the company’s long-term objectives, why should we enter it? We might also lack the skills and resources that are required to succeed in a segment, even if it is attractive. An example: the economy segment of the automotive market is quite strongly growing. Nevertheless, it would not make that much sense for a company such as Ferrari to enter this segment. The reason simply is that the company would not be able to create superior customer value in this segment.Instead, it will be much more profitable for the company to focus on segments that meet its objectives and strategy. 90003 90018 90011 Selecting Target Market Segments — Step two of Market Targeting 90012 90021 90002 After having assessed the identified market segments, we can now go on with selecting the most profitable ones for the company. First of all, what is a target market? It refers to one set of buyers who share common needs or characteristics the firm decides to serve. So, the company has to decide which and how many segments it will target.Thus, we arrive at the actual core activity of market targeting. Market targeting can take different forms. These are referred to as levels of market targeting. A firm can target very broadly, which is called undifferentiated marketing. Market targeting can also be very narrow, which is called micromarketing. If it is somewhere in between, it might be differentiated or concentrated market targeting. 90003 90002 We will now look at these four different market targeting strategies that go hand in hand with the segments we choose.90003 90002 Four Market Targeting Strategies 90003 90018 90011 Undifferentiated (Mass) Marketing — Broad Market Targeting 90012 90021 90002 If we look at the whole market as a pie, following the undifferentiated market targeting strategy, we would focus on the whole pie. We would not select the slice that appears to be most delicious, but try to eat all of them. Thus, there is actually no targeting at all. 90003 90002 Following an undifferentiated (mass) market targeting strategy, the company decides to ignore differences between market segments and to focus on the whole market with one offer.Therefore, the firm has to focus on what the whole market has in common in terms of the needs of consumers, rather than focusing on what is different. Since the company wants to address the whole market, it needs to design a product and a marketing programme that will meet the needs of and appeal to the largest possible number of buyers. 90003 90002 There might be some doubts whether this market targeting strategy is the right one. Certainly, difficulties can arise in developing a product that is capable of satisfying all consumers.In addition, companies that follow this strategy often struggle to compete with those companies that pursue a more focused strategy. Those focused companies simply do a better job at satisfying the unique needs of specific segments and niches, whose presence can not be denied. 90003 90018 90011 Differentiated (Segmented) Market Targeting 90012 90021 90002 A differentiated market targeting strategy means that we decide to target several market segments and also design separate offers for each.To return to our previous example, the pie, we would now select the most delicious ones and focus on eating these. 90003 90002 Most large companies follow the differentiated market targeting strategy. For instance, a car company produces several different models of cars, and often even offers different brands. Fiat, for example, consists of more than the core brand Fiat. Think of Ferrari, Alfa Romeo and Lancia. Each brand targets its own segment of car buyers. P & G, to give another example, markets more than one detergent brand, each targeting a different segment.Thus, we select several segments to serve and design separate offers for each. 90003 90002 The reason of pursuing this market targeting strategy is that higher sales and a stronger position within each segment can be the consequence. Certainly, a strong position within several segments generates higher total sales than an undifferentiated marketing across all segments. However, differentiated market targeting strategies also increase costs. These come from the fact that different offerings have to be developed for each segment.Instead of producing one product 10,000 times, the company has to produce 10 products 1,000 times each. Also, the development of separate marketing plans for each segment involves additional research, analysis, planning and forecasting. Consequently, the company should weigh increased costs against the benefits when deciding on a differentiated market targeting strategy. 90003 90018 90011 Concentrated (Niche) Market Targeting 90012 90021 90002 To stay with our example: If we do not want to eat the whole pie, neither several slices, but only one small slice that has a special criterion others do not have such as a nut on top, we go for the concentrated (niche) market targeting strategy.90003 90002 Following the concentrated market targeting strategy, the company focuses on one or a few segments or niches in a market. The aim is then to reach a large share in this segment or niche, instead of going after a small share of a large market. 90003 90002 Why should a company do so? Clearly it will be able to achieve a stronger market position in the chosen segment because its knowledge of the consumer needs in the niche is larger. Also, it may acquire a special reputation for delivering exactly what the consumer wants in that niche.The company can fine-tune its products, marketing programmes and prices to the specific needs of consumers in the niche. Therefore, its marketing becomes more effective. But marketing may also become more efficient, because the company can tailor its offerings, channels and programmes to the needs of those consumers it can serve best and most profitably. 90003 90002 The difference between a niche and a segment is the size. While a segment is rather large and will in most cases attract several competitors, a niche is quite small and may be focused on by few competitors only.Niching thus allows especially small companies to focus their limited resources on serving niches. The key is to find those niches that are overlooked by larger competitors. 90003 90018 90011 Micromarketing — Narrow Market Targeting 90012 90021 90002 In our example, micromarketing would mean to eat the nut on the already special slice only. 90087 In fact, micromarketing means nothing else than tailoring the marketing programmes and products to the needs and wants of individual consumers or local customer segments.This is the narrowest market targeting strategy possible. Instead of seeing a customer in every individual, we see the individual in every customer. We can tailor our products and programmes to suit the tastes of specific locations of specific individuals. Therefore, micromarketing can take the form of local marketing and individual marketing. 90003 90002 Under the local marketing strategy, we tailor brands and promotions to the specific needs and wants of groups of local customers. These may be cities, neighbourhoods etc.90003 90002 The most extreme market targeting strategy option is individual marketing. Then, we tailor our marketing programmes and products to the needs of individual customers. This is also called one-to-one marketing, markets-of-one marketing and mass customisation. Today, this customisation for individual customers is facilitated by new technologies, such as databases, robotic production and flexible manufacturing. 90003 90002 In micromarketing, relationships with the few customers the company focuses on is of utmost importance.The company can simply not afford to lose one of the few, but highly profitable customers. 90003 90010 90011 Factors influencing the Choice of the Market Targeting Strategy 90012 90013 90002 Which market targeting strategy is chosen depends on many factors. None of the strategies above works best in every situation. Rather, the market targeting strategy depends on several characteristics of the company. When choosing a market targeting strategy, the company should consider: 90003 90024 90025 90011 The company’s resources.90012 If resources are limited, a concentrated market targeting strategy might make more sense. 90026 90025 90011 The degree of product variability. 90012 In case of uniform products, such as apples or steel, undifferentiated marketing may be more suited. In case of products that can vary in design (cars, cameras etc.), more narrow differentiation and concentration is suitable. 90026 90025 90011 The product life cycle. 90012 When a company introduces a new product, it may be helpful to launch only one version.Undifferentiated or concentrated marketing might make most sense. In the mature stage, a segmented market targeting may be appropriate. 90026 90025 90011 Market variability. 90012 If you talk about a kind of product where all buyers have the same tastes, buy the same amounts etc., undifferentiated marketing makes sense. 90026 90025 90011 Competitors ‘marketing strategies. 90012 If competitors apply differentiated or concentrated market targeting strategies, using undifferentiated marketing may prove to be fatal.However, the firm might also gain an advantage by using a different market targeting strategy than competitors, especially if it can serve individual customers better by meeting their needs. Then, a concentrated market targeting strategy or micromarketing will work best. 90026 90031.