Anshul Agrawal 05
Target marketing, 23-12-2017
PGDM RM 2016-18
A process of breaking market into segments, and then putting the marketing efforts to the segments made to target the set of people who are the best match in terms of need and desire for the product/service being marketed.
This could be a successful way to increase your sales, reduce the marketing cost, and attract new business. In other words it could be the key to make your business a success.
The best part of target marketing is that it reduces your cost and aims at a concentrated target group, which increases the probability to get conversions rates higher and also reduces cost of promoting the product/service also makes it easy and reduces the cost, time and resources for follow up too.
It also helps in focusing on the target group so that the results could be better.
Eg: There is a food delivery service which serves only in GHATKOPAR and is for students, so instead of putting the ad on newspaper, or radio and being visible to whole Mumbai, it’s better to contact nearby newspaper agency and put in flyers in the newspapers which are being delivered in houses in Hostels and colleges of Ghatkopar. It will reduce the cost by many folds and will also help in targeting better and conversion rates will increase.
Market segmentation is done in 4 basic steps or the target market process:
When employing a target marketing strategy, specific needs of people are identified according to usage of the product, and specific marketing plans are made for each of them. Because a customer gets isolated by target market identification, and will be able to satisfy the customers and convince them that the product is designed to solve their problem.
Like the cell phones, years ago they were just a mode of communication, with just a little difference in size, or design. And were available in 1 or 2 colour. The industry begun consolidating and with competition to compete efficiency today its available in form of camera phones, multiple colours, various designs and features, and marketers are searching ways to segment the market for meeting better consumer needs.
It’s difficult to make a personalised marketing strategy for every person and practise it, thus the marketer tries to identify broad classes of buyers who respond to a similar type of marketing action and who have same needs. More the segmentation more detailed information and powerful could be the penetration. But more the filters, shallow the group. The key decision is where to stop segmenting like in the cell phones it started with shapes, went to colour, and now its to lot more specifications and utility.
Bases for segmentation:
· Demographic-gender, age, race etc.
· Geographic-region, area, desity
· Socioeconomic- income, education, occupancy
· Psychographic- personality, values, lifestyle
· Outlet type- instore, online,
· Usage- daily, weekly, once
Selecting a target market:
This can be done by 1) Determining how many segments to enter, 2) Determining which segments offer the most potential.
Determining segments to enter/ 3 types of market:
· Undifferentiated Marketing: 1 product for whole market.
· Differentiated Marketing: multiple segments and separate strategy for each, eg Samsung phones, basic phones, smart phones, various colours, camera phones etc.
· Concentrated Marketing: 1 segment is selected and large share is tried to capture eg. Tata in commercial vehicles.
Market positioning strategies: Many strategies could be involved in developing a positioning strategy, some of them are:
· Product attributes and benefits: setting the brand on specific characteristic or benefits offered, like apple started with promoting Ease of Use.
· Positioning by price & quality: using price/quality of product to use it, where its shown that quality is above price like for the luxury or premium goods.
· Positioning by use or application: putting a product for specific use, like Cadbury did it for ‘shubhaarambh’ as replacement of sweets, and now done to use the chocolate as a desert.
· Positioning by product class: This type of positioning is done to place the product as a replacement for something away from the class like maaza came as a replacement for mangoes
· Positioning by product user: like Harley Davidson does it as machine for bad boys
· Positioning by the competitor: This is done by targeting the competitor directly like Ariel & surf excel.
· Positioning by cultural symbols: bringing a meaningful symbol like POBO for SIMSR POBO for post box77.
· Repositioning: Final strategy to reposition i.e altering or changing a product or brand position, and is usually done to due to declining or stagnant sales. Eg flipkart did it from selling books to everything online.