A target market is a group of customers towards which a business has decided to aim its marketing efforts and ultimately its merchandise. A well-defined target market is the first element to a marketing strategy. The marketing mix variables of product, place (distribution), promotion and price are the four elements of a marketing mix strategy that determine the success of a product in the marketplace.
Target markets are groups of individuals that are separated by distinguishable and noticeable aspects. Target markets can be separated by the following aspects:
- segmentations - addresses (their location climate region)
- demographic/socioeconomic segmentation - (gender, age, income, occupation, education, household size, and stage in the family life cycle)
- psychographic segmentation - (similar attitudes, values, and lifestyles)
- behavioral segmentation - (occasions, degree of loyalty)
- product-related segmentation - (relationship to a product)
In addition to these segmentations, market researchers have advocated a needs-based market segmentation approach to identify smaller and better defined target groups. Some approaches to these smaller groups are:
- Select the target audience – the customers are grouped based on similar needs and benefits sought by them on purchase of a product.
- Identify clusters of similar needs – demographics, lifestyle, usage behaviour and pattern used to differentiate between segments.
- Apply a valuation approach – market growth, barriers to entry, market access, switching, etc. are used.
- Test the segments – A segment storyboard is to be created to test the attractiveness of each segment’s positioning strategy.
- Modify marketing mix – expanding segment positioning strategy to include all aspects of marketing mix.
Strategies for reaching target markets
Marketers have outlined four basic strategies to satisfy target markets: undifferentiated marketing or mass marketing, differentiated marketing, concentrated marketing, and micromarketing/ nichemarketing.
A market coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer. It is the type of marketing (or attempting to sell through persuasion) of a product to a wide audience. The idea is to broadcast a message that will reach the largest number of people possible. Traditionally mass marketing has focused on radio, television and newspapers as the medium used to reach this broad audience.
Differentiated marketing strategy
One where the company decides to provide separate offerings to each different market segment that it targets. It is also called multisegment marketing and as is clearly seen that it tries to appeal to multiple segments in the market. Each segment is targeted uniquely as the company provides unique benefits to different segments. It increases the total sales but at the expense of increase in the cost of investing in the business.
Concentrated marketing Or Niche marketing
A strategy which targets very defined and specific segments of the consumer population. It is particularly effective for small companies with limited resources as it does not believe in the use of mass production, mass distribution and mass advertising. There is no increase in the total profits of the sales as it targets just one segment of the market.
For sales teams, one way to reach out to target markets is through direct marketing. This is done by buying consumer database based on the defined segmentation profiles. These database usually comes with consumer contacts (e.g., email, mobile no., home no., etc.).
The psychology of target marketing
A principal concept in target marketing is that those who are targeted show a strong affinity or brand loyalty to that particular brand. Target Marketing allows the marketer or sales team to customize their message to the targeted group of consumers in a focused manner. Research has shown that racial similarity, role congruence, labeling intensity of ethnic identification, shared knowledge and ethnic salience all promote positive effects on the target market. Research has generally shown that target marketing strategies are constructed from consumer inferences of similarities between some aspects of the advertisement (e.g., source pictured, language used, lifestyle represented) and characteristics of the consumer (e.g. reality or desire of having the represented style). Consumers are persuaded by the characteristics in the advertisement and those of the consumer.
- Kurtz, Dave. (2010). Contemporary Marketing Mason, OH: South-Western Cengage Learning.
- Cohen A. Wiliam. (2005) The Marketing Plan. John Wiley & Sons, Inc.
- Aaker, J., Brumbaugh, A., & Grier, S, & Dick Trickle. (2000). "Nontarget Markets and Viewer Distinctiveness: The Impact of Target Marketing on Advertising." Journal of Consumer Psychology (Lawrence Erlbaum Associates), 9(3), 127. Retrieved from Academic Search Premier database