Target Marketing

The key to marketing success – Focus, Focus, Focus

•  Why Target Marketing •  The Marketing Concept •  Advertising & The Marketing

Concept •  Demographics

“The key is to develop control of the business rather than be controlled by it.”

Advertising and the Marketing Concept

•  What are the existing customer attitudes? •  Refining target market definition:

–  Who can the firm best satisfy? –  Who is the target? –  Once identified, exactly what does the target

want? –  How can the firm satisfy these wants/needs? –  What should be its marketing mix?

“Directed effort, planned according to the individual firm’s unique situation, will lead to profitable

operations.”

The Marketing Concept

•  Three Key Components: –  Customer orientation –  Integrated company effort –  Goal to increase profits rather than increase

sales

Eight Steps

1.  Define the product/service 2.  Consider wants/needs the product/service

can satisfy 3.  Identify market segments 4.  Segment the market 5.  Rank differentiated segments 6.  Evaluate segment mixes 7.  Formulate strategy 8.  Execute strategy

Step #1: Define the Product/Service

•  What is special about the product/service? •  What makes this company unique? –  Why should people buy from this business

rather than some other?

•  What gives it the potential to do things well?

•  Product skills and resources allow smaller firms to differentiate themselves from larger competitors

Step #2: Consider the wants/needs the product or service can satisfy:

•  How can the product/service satisfy? •  What is the perceived benefit? •  Why will your audience want it?

Seven Reasons For Wanting Things

1.  To fill biological needs 2.  To gain security 3.  To gain status 4.  To gain recognition 5.  To satisfy aggressions 6.  To satisfy sensibilities 7.  To satisfy sex motives

Step #3: Identify Market Segments

•  What are the groups that will want/need this product/service?

•  Which of these groups are the most logical?

•  Which of these groups are not obvious but still likely to buy?

Step #4: Segment the Market

•  Differentiate by characteristics and other considerations –  Ex: Economic, Socioeconomic, Geographic,

Demographic…etc. •  Find the part of the market that will buy your

product/service •  Realize: –  Some groups are direct customers –  Some groups may never be customers

Step #5: Rank Differentiated Segments

•  The goal is profit •  Be sure there is a market big enough •  If the “bull's-eye” is too small, aim for the

next ring as well

Factors Affecting Profitability

1.  Direct Sales Cost 2.  Indirect Sales Cost 3.  Distribution & Logistical Problems 4.  Pricing (Some segments may be more price

sensitive than others) 5.  Size of Segment 6.  Ease of Selling to a Given Segment 7.  Image of the Firm in the Market 8.  Sales Personnel – Skills and Weaknesses

Step #6: Evaluate Segment Mixes

•  Can members of different groups be reached through the same media?

•  Are the objectives too broad?

Target Market Refinement

•  Key Questions: –  What is the size of the market? –  What are the segment sizes of primary

importance? –  Are there groupings of segments that can be

appealed to economically? –  What is a realistic penetration of the chosen

segments? –  Is this penetrations sufficient to yield a profit?

Step #7: Formulate Strategy

•  “The worst strategy is no strategy at all.” •  Advertise to the right people •  Use effective tools: –  Ex. Mailing lists, Coupons, Offers,

•  Obtain information and test it’s affectivity

“The more accurately you can reach your target market, the more effective your campaign will be.”

Step #8: Execute Strategy

•  Verify that your plan is strong •  Stick to your plan! –  If it was carefully thought out, it deserves a

chance –  However, don’t follow it blindly –  Monitor and control

Q&A