What is Targeted Marketing?
Product promotion is the key to success for any brand. While this article will focus on targeted marketing, let’s look at the other steps of promotion briefly. The three steps are called STP – segmentation, targeting and positioning. Segmentation breaks an entire market into smaller groups. Targeting is selecting exactly which group to focus the advertising efforts to. Positioning is to position the brand as the best choice among its group. People sometimes use the term “promotion” loosely to describe the entire process which can create a bit of confusion.
Targeting refers to the product promotion wherein companies are customising their advertisement to cater to a specific set or small group of consumers. Marketers believe that it’s not possible to please everyone – that a business should be specialized in order to thrive. The companies study their product and learn who they should market their brand to. They select their targets based on who can strengthen their brands the most and who can increase their sales as well.
The group segmentation is the product of extensive research that identifies different groups based on the needs and preference of the local market. After this separation, targeting can now take place. There are different types of targeted marketing strategy you can employ but combining a couple of strategies can gain more attention from a wider base of potential customers. The age target marketing or generational marketing can help the marketers determine the music, visual and total feel of the advertisement. The income-sensitive marketing can help determine the price range for the products intended for a specific group – high end products intended for high end market will be priced higher and vice versa.
Gender-specific marketing can dictate colour and language use in the campaign – campaign directed for pregnant women will use soft hues and soothing sound. Geographic target marketing or seasonal marketing can cater to shifting consumer moods as the weather turns hot or cold – just like how some coffee shops add Christmas inspired coffee to keep up with the holiday spirit.
The main principle of targeted marketing is that a product can never be sold to everyone successfully. The needs, preference, taste, habits and beliefs of all people are different from one another. It is virtually impossible to create a product that is truly universal to everybody. Even as basic as water, some people prefer it sparkling or still or just plain tap water. Using this kind of marketing method, companies can reach out to specific groups and focus their efforts on that particular group’s wants and needs. This gives more power to a business. When a company knows exactly who they are selling to and what compels their target market to buy, it is easier to create marketing campaigns that best communicate the message of the brand effectually. And it is this message that gives sales a boost thus driving up profit for the company.
Targeting can also help an organization get a prediction of how much of a certain product they’ll sell. These estimations are very important for purchasers, inventory managers and production managers to know how much of a product they should buy, stock or produce to make sure that they have enough products to meet purchasers’ demands. It can also help a new business on their proposal to get start-up capital from private investors or banks. By studying a selected group and predicting the number of transactions likely to happen, the company has a better concept of their return on their investment and profit. It’s also easier to thoroughly think about advertising platform and schemes when catering to a specific group.
There are different approaches for targeting. The first one is the undifferentiated approach where instead of tailoring your advertisement to sell to just one or two groups, you use a campaign that aims at gathering buyers from all walks of life. This can work for products or services with wide-ranging appeal that transcends age, gender and location. Although this approach can reach more potential buyers, it’s difficult to create an advertisement that will be able to communicate and touch different kinds of people.
The second one is the differentiated approach where you address your advertisement to two or more specific sectors of your market that has likely become your loyal buyers. Acknowledging them in your ads can create rapport between the company and the identified customers. Often, companies create events and programs that directly speak to the wants and needs of specific groups, although the product and services provided are technically the same for all consumers.
The third and last approach is the concentrated approach where the company identifies just one specific group that is highly likely to generate enough income for them to produce a profit. This involves finding a niche market, offering something that the competition does not have. But this approach is becoming more and more unpopular as it is very risky. Failure to sell to one specific targeted group may force the brand to completely re-evaluate its marketing scheme or even shut down.
Re-evaluation or changing of marketing approach is normal. Marketing is flexible and always changing. Even the most successful advertising campaign will find a plateau and lose its initial buzz. Often a brand will reach a point where it can no longer attract new customers in specific groups because there are no more buyers to attract; the company has exhausted all potential in that group. That’s the time a company will change their marketing approach or shift target markets completely. For a healthy and strong advertising campaign, it’s important to stay on one’s toes and observe periodic evaluation.
In conclusion, picking target groups allows the company a degree of focus that will streamline their methods, thus making the operation simpler and more cost-effective. Although bear in mind that targeted marketing is not just picking up two to three groups at random, it takes a lot of research and study that cost a lot of money. As they say in business, if you want to make money, you must spend money.