Marketing consists of strategies and tactics used to identify, create, and maintain satisfying relationships with customers that result in value for both the customer and the marketer. Marketers are therefore supposed to identify the markets and then come out with appropriate strategies. This process involves two very crucial components called segmentation and targeting.
In simple terms market segmentation is the process of broadly identifying different types of markets, customers etc. Segmentation is required to be done depending on a range of factors like the customer profile, preferences, paying capacities, usage of credit card, number of travels, and geographical factors. In order to market a product or service, it is imperative that a company tailors the marketing and sales efforts to specifically reach the segment of population that are most likely to buy these products or services.
Identifying primary market is very critical for a successful business. It is indeed quite a challenge to segment a price sensitive market, as the company might end up losing a good share of its customers, if it plans its services for some other segment. For example, if the segmentation is being done for the retail sector, then the segmentation process might involve classifying the customers on the basis of goods and commodities being purchased, number of visits to the superstore, size of family etc. similarly, if it has to be for an airlines industry, then we need to take into consideration the general aspects of airlines industry, duration of the travel, type of traveller corporate or general etc.
It is not a must that all corporate clients would prefer to have meals on their journey’s ranging from one hour to two hours. Such a journey can be undertaken with a low-cost airline which cuts the cost by not serving the meals. During such a journey what the client will be looking at is a thorough professional approach from the airline staff and a comfortable journey. Though an airline is not limited to one particular segment but still for the sake of pooling efforts it is very important that the airlines identified and divided the customer base into a range from Finest for those wanting something special, to Value for those on a budget. Therefore, segmenting essentially involves identifying customers with homogenous attributes who are expected to respond to the company’s marketing mix in similar manner.
Once the market has been segmented, the marketing team prepares a product-market profile and start targeting those segments by fine-tuning their strategies to suit the needs and requirements of those segments. The targeting process differs from the segmentation in the sense that while segmentation works on the basis of reports and trends available in the market, targeting works on the basis of ground realities. During this process the identified groups and compared and evaluated and then the marketing team zeros in on one or more segment having the highest potential under the circumstances.
Subsequently, marketing professionals start devising strategies in such a manner that when the individual segments are targeted, they should have the desired effect on the existing or prospective customer. For example, in the airlines industry, the emergence of low-cost airlines has made the industry fiercely competitive. After, these low-cost airlines identify the markets they come out with offers tending to attract the railway passengers. In addition, the low-cost airlines also target some of their resources towards the high-end corporate customers. The targeting process also involves;
- Planning Products/Services as per the needs of the market: The inputs studied and analysed during the segmentation process come in handy for target marketing. Based on the segmentation done, the marketing team goes into an overdrive to start packaging the products and services, as per the customer preferences. The growth strategy of any service or product company is based on a variety of key components, which happen to be industry or location specific.
- Planning a Promotion Strategy: Inviting the attention of those for whom the products or services are meant is crucial for the long-term survival of a business. Newspapers, television commercials, radio jingles, web pages etc. are the important companions of target marketing. If the messenger is someone with whom the prospective customer can identify himself the message reaches swiftly and effectively.
- Setting up a Marketing/ Distribution Network: Targeting the customer also involves making one’s presence felt at a place most convenient for the customer. Existence of a well-established marketing network helps in targeting the product or service to the intended customer/ segment. This also involves entering into joint ventures, collaborations, mergers and acquisitions etc.
- Taking Pricing Decisions: A product can be priced in many ways depending upon the cost of manufacturing, the cost of reaching out to customers, the income levels of market segment etc. Product pricing also depends on the availability of competitors in the market and certain rules and regulations of the land.
- Planning for After-sale Services: It is said that when customers aren’t happy with your business they usually won’t complain to you – instead, they’ll probably complain to just about everyone else they know – and take their business to your competition next time.1 Therefore, following the customer and reaching out to him/ her at the time of need helps in success of the target marketing exercise.
- Gathering Feedback: Keeping eyes and ears on the customer behaviour helps in gathering enough feedback for any organisation. This bodes well for the success of target marketing.