1) Deciding your market segment as well as deciding on who your target customer is going to be.
Deciding your target segment – A major step of target marketing is to first decide who is going to be your target market. As mentioned in segmentation, targeting and positioning, the first step in targeting is to carry out segmentation of a population. Only through segmentation we would come to know which segment would be most profitable for us. The segmentation can be done on three basis
A firm can target one type or a mix of the above segments. Thus a segment can be both geographic as behaviorally defined. Once you know which kind of a segment you are targeting, your marketing mix can be decided accordingly for target marketing.
A) Marketing mix for target marketing –
Once the target segment is decided, the marketing mix strategy automatically follows. If your product is independent, but you have adopted geographic segments, then your pricing, promotions and placement depends on the purchasing power and other characteristics of that geographic segment.
Similarly, if you have decided to target the higher income group segment, you need to have a product which appeals to the high income group, it has a premium pricing as high income groups are not interested in products which everyone can buy, it needs to have a good product placement such that it is in the reach of high income group segment, and finally the promotions needs to compliment this target marketing strategy.
B ) Target Market selection –
In target marketing, the target market selection is done on the basis of five factors
- Single segment concentration – Concentrating on one single segment such as concentration of several FMCG products only on low income group segment
- Selective specialization – As said above, concentrating on a segment which is hybrid. Such as middle class segment in A grade cities only.
- Product specialization – Launching products which appeal to a specific target group. Such as Volvo which targets only safety conscious people.
- Market specialization – Targeting to one single market. Such as Mahindra and Mahindra which targets mainly the government sector.
- Full market coverage – Automobiles such as Honda or Maruti which targets the complete market with various offerings.
Target marketing also involces positioning as a critical factor. Once the target market has been defined, it is followed by the marketing mix decisions. However, in this itself the factor of positioning is involved. The 4 P’s of the marketing mix should be such that they position the product in the right way in the consumers mind.
Target marketing is on the rise as even mass marketing companies have realised that they should have different strategies for different target customers. This is where customer life cycle targeting and family life cycle targeting comes in the picture. The complete process of target marketing is mentioned below with proper examples.
C) Case study of Target marketing – Titan watches
- Segment selection – Titan mainly targets multiple segments based on their income, social standing as well as behavioral attributes. Thus it targets customers who have low incomes along with customers with high income.
- Marketing mix – Titan does not offer the same product to different customers. In fact it has a new product for each segment thereby micro managing its target marketing efforts. Thus a Sonata will be offered to the low income group whereas a Tommy hilfiger will be offered to the high purchasing power individual
- Positioning – Each product of Titan is positioned separately. Furthermore when you walk into the retail store of Titan (World of titan) you will find that there are separate sections for each class of customers depending on their income groups.
- Customer life cycle marketing – Another example of target marketing is having every product in the kitty for each level of a customers life cycle. Thus by having brands like Fast track, raga and others, Titan ensures that it has a product whether its customer is a college going individual, a working women or a high income professional.
Thus with the above four strategies, Titan ensures that its target marketing is spot on.