A successful business directly depends on the ability to satisfy customer needs. All buyers have different tastes and preferences, so it is almost impossible to work with the entire potential audience of the market. Of course, you can make some kind of universal product that will have averaged characteristics. But no consumer will like it. Therefore, companies are trying to find "their" customers, that is, the target audience that will fully satisfy the company's product.
Company segment
In marketing, such a thing as a target market is considered key. By this concept is meant an attractive sector of the market where the company operates, in order to fully realize all marketing opportunities and attract more customers.
Marketing approaches help highlight targeted markets. They are massive and concentrated, but in each of them it is necessary to identify specific segments and understand how to position your product. According to statistics, representatives of the target market are more interested than other buyers in buying and using the goods of a certain company. This kind of increased interest greatly simplifies the work, but most importantly, it helps to understand the basic needs of buyers of this market share.
Destination
If the company understands to whom exactly it is selling the product and who most often will buy it, then it costs nothing to create the right advertising that will have a high response. Also, an understanding of such details helps to create the right packaging, gives the product the qualities it needs and determines its place in the sales department.
For a deeper understanding of the essence of this phenomenon, it is worth giving a small example. Let's say a company produces and sells toothpaste. If her target audience is young office workers (25-35 years old), then it is important to focus on whitening and a refreshing effect. Also, this audience will pay attention to packaging design and statements about the effectiveness of the product (it is better if they are written in “smart” words). But if pensioners are the target audience, then the priority will be not the whitening properties of the paste, but “gum protection” and “delicate care”. Also, elderly people pay attention to the price-quality ratio, in addition, they will look for the names of natural components in the composition, and not for furious “fashionable” terminology.
Choosing Your Place: The First Method
When choosing a target market, methods tested by time and experience will help. For example, you can release a product that can become attractive to each group of customers. In this case, the strategy of mass marketing is applied, or, as it is also called, the strategy of large sales. The main goal of this method is to organize maximum sales. This strategy is expensive, so it is usually used by large corporations that can afford it.
Second way
The second method says that you need to focus on a specific market segment. Here, a concentrated marketing strategy is applied, which is aimed at a specific group of consumers. This sales method is attractive if resources are limited.
Enterprises concentrate their efforts and resources where they have obvious advantages over competitors. This allows you to create a stable market position due to the uniqueness of the product and its individuality in satisfying user requests. Such a strategy helps maximize profits per unit of product and compete with other enterprises.
Third decision
The third method consists in choosing not one, but several segments of target markets for further work. For each segment, a company can produce a separate product, or it can simply supply a variety of it (for example, yogurt for children and adults). This is called a differential marketing strategy. Here, for each individual segment, separate marketing moves are used. To cover all selected segments, you need to invest a lot of money and effort, but on the other hand, the release of several products helps to maximize sales.
Having established itself in any one segment, an enterprise can expand its field of activity. It is much easier to do this when the buyer already knows the manufacturer.
Segmentation Features
It is worth noting that in the process of segmentation of the target market, marketers neglect some of its parts. For example, now many products are aimed at families or young people, and such niches as “teenagers” and “pensioners” have been left without new products for a long time. This situation is called the "market window." If the manufacturer wants to close such a window, then it is likely that success will await him.
After determining the target market, an enterprise should first of all examine competitors and their products. Only after specific conclusions are made based on statistical information, the company can decide on the positioning of its products. That is, to talk about the competitiveness of goods in the market.
Varieties of trading floors
The study of target markets showed that there are 2 main types: primary and secondary. These markets are distinguished by motives for buying and approaches to the selection of goods. In addition, they have their own dimensions, behavioral and psychographic characteristics.
Primary is the company's main market , which makes a profit. Its representatives are all buyers who have a pronounced need to purchase company goods.
Secondary are all customers who:
- They can spontaneously buy a product.
- May influence the choice of goods by representatives of the primary market.
- Will become potential buyers in the future.
Simply put, the secondary market is the buyers who can potentially acquire the goods of the company and, most likely, will do so.
How to describe the market?
Before you plan to capture a segment, you need to describe it in detail. Only through a detailed analysis of the target market can we understand what exactly the buyer wants and how to please him.
In general, there are four main criteria that help assess whether the target segment is correctly described.
- The parameters of the target market should be common for this market and differ for other buyers.
- There must be a parameter that describes the decision to purchase the product.
- The market needs to be combined according to the parameters set by the company.
- The parameters underlying the description of the target market of the company should allow for high-quality targeting and plan advertising campaigns.
7 characteristics of the target segment
In general, the characteristics of the description are divided into seven main groups:
- Socio-demographic. Marketers should specify the characteristics of the market by such parameters as gender, age, income, marital status, occupation, nationality, etc. All these characteristics have a decisive influence on the choice of a communication channel and the further planning of advertising campaigns.
- Geographical. They give a clear description of the area that the company plans to serve. This includes items such as country, city, region, population, climate, and location of the target market.
- Psychographic. These characteristics will help determine the nature of the buyer and his lifestyle. Understanding this process will allow you to choose the right advertising message and basic images for the image of the product. These parameters include the buyer's idea of himself and how he wants to see himself. For example, here you can describe the marital status of a person, his favorite TV shows, preferences in spending leisure time, political affiliation, etc.
- Behavioral. They provide an opportunity to understand what methods customers are guided by choosing a specific product. This may include information about the reason for the first purchase, the number of purchases for a specific period of time, the speed of decision-making, how to use the product, etc.
- The main drivers of the purchase. To evaluate this characteristic, such parameters as product quality, price, brand, packaging, service, guarantees and the possibility of returning the goods are most often used.
- Market size. This information will make sure that the number of potential buyers is really large, and the company will make a profit by releasing a specific product.
- Trends Not a single target market is a stable substance, it is prone to changes, and when choosing marketing methods for promoting goods, one needs to take into account key trends that affect the development of the market. Here, experts consider such parameters as the level of stability, growth prospects and purchasing opportunities. These trends need to be considered in the spectrum of influence of the economy, politics, market growth rates.
Position change
Once marketers have identified the target market and the company began to work according to the developed strategy, there may be some difficulty in selling the product. Then the company takes active measures to reposition the product.
Repositioning is a strategic action aimed at changing the existing position of the product in the perception of the buyer. Usually this path consists of several stages:
- Improving price, quality and other consumer characteristics.
- The introduction into the minds of potential buyers of new criteria for the perception of the product. For example, a manufacturer who has released goods on a target market may begin to focus customer attention on naturalness, comfortable use, environmental friendliness, etc.
- A firm can draw attention to those product features that were previously ignored, for example, to indicate a new benefit.
- The company often during the repositioning provides the buyer with comparative advertising, thereby forming an attitude towards competitors.
Repositioning tool
In the process of repositioning the product on the target market, an important role is played by the differentiation policy. These are actions that form the distinguishing features of a product relative to similar products of competing firms. The basis of this process is the search for unique distinctive characteristics of the product. The company can expand the available characteristics of the goods, pay attention to the duration of operation, improve the service, providing services for consultation, repair or replacement of goods.
Simply put, differentiation in the process of repositioning is associated with an improvement in the product and all associated characteristics.
Selling a product is easy. It is difficult to form a stable group of buyers who will be able to solve their problems with the help of the product and thereby make the company profit. Only in this way can a business turn into a successful enterprise, and not be another company that can barely stay afloat.