Targeting

 Introduction to Targeting

Targeting is a crucial step in the STP (Segmentation, Targeting, and Positioning) process, where a company selects specific market segments to focus its marketing efforts on. It involves evaluating different segments based on their potential profitability, growth prospects, and alignment with the company's objectives.

Successful targeting ensures that marketing resources are efficiently allocated, leading to higher customer satisfaction, better competitive positioning, and improved brand loyalty.

Types of Targeting Strategies

1. Mass Marketing (Undifferentiated Targeting)

• A single marketing strategy is applied to the entire market.
• Assumes all customers have similar needs and preferences.
• Focuses on economies of scale and cost efficiency.
• Example: Coca-Cola's initial marketing approach focused on selling the same product worldwide with a universal appeal.

2. Differentiated Marketing (Segmented Targeting)

• A company develops different marketing strategies for different segments.
• Allows customization of products and messages to suit each segment.
• Increases market share and customer loyalty but may lead to higher costs.
• Example: Maruti Suzuki offers different car models for different income groups (Alto for budget-conscious buyers, Ciaz for premium customers).

3. Niche Marketing (Concentrated Targeting)

• A firm focuses on a specific, well-defined market segment.
• Useful for businesses with limited resources or specialized products.
• Higher profit margins but comes with high risks.
• Example: Rolex targets only the luxury watch segment.

4. Micromarketing (Individual or Localized Targeting)

• Customizes marketing efforts at an individual or local level.
• Enabled by advanced technology and data analytics.
• Example: Amazon recommends personalized products based on a customer’s browsing history.

Key Dimensions of Targeting

1. Market Potential and Segment Size

• The chosen segment should be large enough to be profitable.
• Growth potential should be evaluated to ensure long-term sustainability.
• Example: Electric vehicle manufacturers targeting environmentally conscious consumers.

2. Competitive Landscape

• The segment should not be oversaturated with competitors.
• Differentiation strategies should be implemented to stand out.
• Example: Apple differentiating itself in the smartphone market with premium features and ecosystem integration.

3. Customer Accessibility

• The company must have the means to effectively reach and serve the segment.
• Factors include distribution channels, media reach, and digital presence.
• Example: Fast food chains like McDonald's selecting urban locations with high footfall.

4. Profitability and Pricing Sensitivity

• Target segments must be financially viable.
• Pricing strategies should align with segment expectations.
• Example: Luxury brands like Louis Vuitton cater to high-income groups who are less price-sensitive.

5. Consumer Behavior and Psychographics

• Understanding consumer attitudes, lifestyles, and values helps refine targeting strategies.
• Example: Nike targets fitness enthusiasts with an aspirational brand message.

Process of Targeting

1. Evaluate Market Segments – Assess segment size, profitability, and growth potential.
2. Analyze Competition – Identify existing competitors and market gaps.
3. Assess Internal Capabilities – Check if the company has the necessary resources.
4. Select Target Market – Choose the segment(s) based on alignment with business goals.
5. Develop a Positioning Strategy – Create a unique selling proposition (USP) for the selected segment.
6. Implement and Monitor – Execute strategies and track performance for optimization