Outlines what is targeted marketing, why it is important and how to do it, plus explains segmentation in marketing to determine targets.
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CONTENTS
What is targeted marketing?
What is a target market?
What is strategic marketing?
What is targeted marketing: looking at market segmentation
Why narrow down the target market?
How do you define your target markets?
What methods will help you determine?
Tools for strategic marketing and target market identification
Strategic marketing: How to address your target audience
Conclusion: It is crucial to define the target market
What is targeted marketing?
Targeted marketing focuses on promotion to segments of the market (the targets) that are most relevant for your business. For example, if your business is men’s shoes, there is little point having advertisements or promotions in women’s magazines or websites.
To practice what is targeted marketing effectively, you need to identify your target market accurately because no company can serve the entire market of all potential target groups. Why is this so? How do you identify and classify your target markets ? And how do you specifically address customers ? Read more below where we explain about strategic marketing, market and target group analysis.
What is a target market vs marketing to the masses?
Marketing to the masses means marketing broadly without considering which segments of the market are likely to be your customers. On the other hand, a target market can mean: a demographic, region or country into which you want to expand. What is meant here, however, is above all the target market in the sense of a target group, i.e. a market segment. Define the target market that you want to address and conquer (and above all: can!) as part of your strategic marketing .
What is strategic marketing?
Strategic marketing has nothing to do with advertising: Strategic marketing means to lead your company permanently according to market requirements. This also includes fundamental decisions such as product or price policy . In contrast, corporate communication measures fall into the short-term area of operational marketing.
First select the target market, then the specific marketing strategies and measures for addressing target groups! Divide the overall market into customer groups or market segments. Your target market customers should be groups of people who have similar desires and needs. They share common characteristics and interests, and ideally they are also similar in terms of purchasing behavior.
What is targeted marketing: looking at market segmentation
These target markets are the result of the market segmentation and the evaluation of the resulting sub-markets. Several segmentation methods can be used, such as factor analysis, cluster analysis, conjoint analysis, multidimensional scaling and / or discriminant analysis.
Subsequently, it is decided to what extent the entrepreneurial resources are sufficient to implement target market strategies. With regard to the two dimensions of products and markets, there are four options: Concentration on one segment or a combination of several segments, product specialization, market specialization and / or complete market coverage.
Why narrow down the target market?
If you are targeting the overall market , chances are that nobody will feel directly addressed. Many entrepreneurs are afraid to focus on one target market . They fear excluding too many potential customers. However, if you address everyone, the advertising investment and wastage are huge. In addition: What use are the best offers if they are communicated “past” the target market? Only if you know your clientele exactly will you know who is suitable for you.
How do you define your target markets?
Analyze :
- Who is my customer already (if your business is already open)?
- Who do I want to address?
- Which of my customers are the most profitable?
- Which customer problems do my products solve, whose needs do they satisfy?
Typically, you use socio-demographic characteristics to narrow down . Examples are: Generation Y with low incomes, unmarried men up to 30, best agers with higher incomes or families with children. The needs of your groups of people should be similar to one another and clearly distinguishable from one another.
Limit your target market not only socio-demographically, but also product-related : mainly young, tech-savvy men with higher incomes are interested in Dolby home cinema systems – for example, singles under 30 with a high need for recognition. Basically, the higher the income, the more important the brand, the design and the quality are to the customers. With lower incomes, the price plays the main role. Chanel customers are hardly enthusiastic about C&A, BMW drivers are difficult to win for Skoda.
A third point is buying and consumption behavior . Does your offer appeal to a store audience? Are they prospectus buyers or e-commerce shoppers? In the case of the former, the question of location, shop window design and public advertising are all decisive factors. With the latter, the right contact approach – for example via social media or performance TV.
What methods will help you determine?
There are several methods that you can use to help you segment and evaluate the market . Three examples: With a cluster analysis you summarize certain customer groups according to similar needs as well as buying and decision-making behavior. With a conjoint analysis you determine ideal product properties from the customer’s point of view: For example, whether they prefer sportier or more environmentally friendly vehicles. This process is often used for new development or diversification. They can also identify gaps in the market and “discover” needs that have not yet been awakened. Understaffed markets can also be identified.
Market segmentation processes that take into account several dimensions are suitable for setting up your company : socio-demographic customer groups, preferred product characteristics and consumer behavior. Here, segments are created from intersections that can be compared and evaluated . Are there more target groups available than you can edit:
- Narrow down the selection process.
- Create market analyzes with market volume and achievable market share.
- Get a market development forecast and competition analysis.
After all, you are faced with the question of what business resources you can use. Do you concentrate on one segment or do you combine several? Do you specialize or are you aiming for more extensive market coverage? Make up your mind.
When defining your target market, also think locally: Your future franchisees need a catchment area that offers them enough potential for a successful existence. Pass on your experience and the tools for your own market analyzes, location analyzes and customer surveys on site to your franchisees .
Tools for strategic marketing and target market identification
Management consultants who specialize in franchising have already successfully accompanied many systems in their development . It is one of their core competencies to create target market segmentations.
The Internet can also help you determine target markets . There you will find software programs or paid online tools such as “Create a location analysis yourself” from the Founders Lexicon Academy. If you do not want to invest in these systems, you can also carry out your analyzes yourself – albeit with a considerable expenditure of time .
The free tool Google Trends offers first aid with searches : It shows trends and search queries for a product or an industry. You use the Google Suggest function automatically when you enter a search term: Even the first few letters reveal what other users are Googling for in connection with “your” term. Keyword databases such as Sistrix or the Google Keyword Planner are further aids. There you will find the search volumes for certain words. You can use this to derive potential sales potential for marketing campaigns .
However, these tools mainly help online shoppers and website visitors. Surveys on store customers tend to offer market and industry data , which you can find , for example, in studies by the IHKs or industry associations. Other sources are data services such as Statista, the Federal Statistical Office and State Statistical Offices, credit institutions and market research institutes. In areas such as gastronomy or food retailing: Visit weekly markets, set up your own stands, ask your customers.
Strategic marketing: How to address your target audience
One example of strategic marketing and successful target market positioning is America’s leading operator of bungalow amusement parks. With image advertising in TV spots, other classic advertising channels and in social networks, it is wooing a single core target group : parents with children. In addition to target groups such as senior citizens, couples or B-to-B event customers, it speaks with little effort via separate channels .
So you need to ask yourself for you business: Which channels, which media for which target market? What opportunities do cross and affiliate marketing open up ?
Conclusion: It is crucial to define the target market
If you want to attract all kinds of customers, there is no need to start. This would overwhelm their resources. In addition, the market is looking for specialists and not all-rounders. First, narrow down your core target group exactly. Specify your offer for this group of people. Then determine the type and channels of addressing – and then find out about suitable marketing measures.
