When working on your marketing strategy, it’s critical to understand which customers are your target market. These are the people your business can help the most with your products and services. Research your consumer base to understand their needs, likes and dislikes so you can create a marketing campaign that resonates with their interests.
There are different ways that businesses serve their target markets. It all depends on the kinds of products and services they offer and the way they can help their customers. Some businesses offer a wide range of products at different price points so they may appeal to a large target market that's varied in demographics and behavioral attitudes. On the other hand, a business that sells only one niche service may only appeal to a small market segment with a specific geographic or psychographic trait.
The different types of target market strategies include:
- Mass marketing: The target market for this kind of strategy is a large, varied group of people. These businesses serve several different kinds of products or services. For example, a large department store may use mass marketing tactics to reach its varied target market.
- Differentiated marketing: The target market for this strategy is large groups of people within a targeted market who share specific character traits. The business offers unique benefits to different market segments. For example, an outdoor clothing store may offer cold-weather apparel in regions that have long winters and warm-weather apparel in regions that have long summers.
- Niche marketing: For this kind of target marketing, the business targets a smaller, select group of people who share particular interests and traits. For example, a pet food store may target pet owners who want to purchase organic food for their pets and can position the food as high-end and exclusive.
- Micromarketing: This strategy involves offering customized and individualized services and products to consumers. A small business may take custom orders through their Etsy store or a local bakery may make donuts with custom toppings on demand. The idea is to appeal to consumers who value choice and customization.
When deciding on which target marketing strategy to use, you must look at the strengths and limitations of your business and products. It’s also critical to have a deep familiarity with your target market and what solutions they're actively looking for in the market.
There are several benefits of target marketing for small businesses. One of the key advantages is that it enables businesses to build a deeper connection with their audience by having a clear, succinct and defined message. When businesses target too many segments with their marketing, they may dilute their message to appeal to the masses. When speaking to a segment, however, businesses can use language and terminology that resonates with the situations of that particular group.
Another key benefit of target marketing is that it allows businesses to stand out from the sea of competitors. By honing in on their unique value proposition and aligning it with the needs and wants of their target market, businesses can show their prospects why they're the right choice for them over their competitors. Target marketing can help make a business more memorable to consumers so they choose it over competitive brands and products.
Providing better products and services to customers is another benefit of target marketing. When businesses have a deep understanding of their target segment and empathize with the issues their consumers are trying to solve, they have more insight into how they can help them. This helps businesses to constantly improve upon their products and services, tailoring them to meet the needs of their consumers.
The way businesses identify their target market will depend on the kinds of goods and services they offer. There are four key strategies of segmentation that businesses can apply to identify their market segments. The target marketing strategy definition includes:
- Demographic: This is the basic way to segment the market. Businesses can group prospects by age, gender, race, ethnicity, job title, income, family situation and other demographic characteristics to better understand their consumers’ interests. Businesses that target married men over 50 will market differently than those that target single men under 25, for example.
- Geographic: This segmentation strategy involves looking at a consumer base’s geographic location, climate, population density and size of region. It can help businesses to cater their marketing and offerings to consumers based on where they live and the requirements that arise as a result of their surroundings.
- Behavioral: Businesses look at their consumers’ behavior toward products based on customer loyalty, frequency of usage, position in the sales funnel, readiness to buy and familiarity with the product. The way a business targets consumers who have no awareness of the product will differ from the way they target loyal customers, for example.
- Psychographic: This segmentation strategy involves understanding the kind of lifestyle the consumers live. It includes their interests, hobbies, opinions, social values, political beliefs and attitudes. For example, a business that wants to target people who value environmental sustainability will use a different message than if they were targeting people who value money and success above all else.
When segmenting your target market, it’s important to build a detailed profile of your ideal customer. This is a reference that anyone in your business can use to understand your consumer. When working on the product or developing marketing communications messages, referencing the customer profile can help employees ensure they stay on track.
Once a business has segmented its market, it can evaluate which segments should be targeted. To do that, it’s critical to first look at the size of each segment. For the strategy to be financially viable, businesses need to target markets that are substantial in size. If a market is too small, it won't be worth it to dedicate resources to reach that market.
In addition, businesses need to evaluate how unique their market segment is. The target market should have unique needs that justify unique marketing messages. If the market is too similar to another segment, they may not be able to identify themselves within the business' messaging.
Accessibility is another evaluation criteria businesses should review when deciding whether or not to target a specific market segment. The market needs to be easily reachable through communication mediums that are affordable for the business. The target market also needs to be in a position where distribution is efficient and cost-effective.
An effective target marketing plan definition includes the ways your business will use the marketing mix to reach your intended customer. Consider these questions when deciding on how to appeal to your target market:
- Product: What features are your target market looking for? What kind of packaging will they find appealing? How does your product help them uniquely solve their problem?
- Place: Where does your target market shop for your product? How can you make it easy for your target market to get their hands on your product?
- Price: What's your target market willing to pay for your product? How does that price stack up with your competitors?
- Promotion: Which promotional medium will be most effective for reaching your target market? How can you tailor your message so it appeals directly to them? Should you consider an integrated marketing communications strategy?