Different Types Of Target Markets – Market targeting is an important aspect of your business strategy, but often businesses are confused about the optimal strategy to implement. While there are several types of targeting strategies that can (and will) be used by a company in marketing, understanding when and how to target your audience properly is critical to maximizing profits and using resources effectively. Proper implementation of targeting strategies in marketing begins with a complete understanding of them and their use cases.
In this article, we’ll explain what target marketing is and discuss four different targeting strategies in marketing. We identify the differences between different types of targeting strategies and discuss the pros and cons of each targeting strategy.
Different Types Of Target Markets
Market targeting begins with assessing and defining your target market, usually in terms of the four target dimensions that marketers commonly reference.
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A Forbes study found that “the biggest challenge for target audiences is identifying the right personas.” By using the right targeting criteria, you should be able to get a clear definition of your target market.
Market targeting is all about using these four dimensions to define your target market and develop the strategies needed to reach your chosen market segment effectively and efficiently.
The types of targeting strategies you use will depend on the type of product you want to market, while the criteria you need to define your target market will depend on the type of target audience you have. In other words, different strategies are needed for different products and services and the ideal customers you are targeting, which should reflect your target criteria. Below, we take a closer look at four types of targeting strategies in marketing.
Let’s briefly define the four types of targeting strategies before going into the pros, cons, and use cases for each below.
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Undifferentiated marketing is a strategy that does not really prioritize market segments. This means that the entire mass of the market is taken as a target customer and the aim of these campaigns is to reach as many potential customers as possible.
Mass marketing strategies include a single message that generally resonates with everyone. This type of targeting strategy is usually applied by brands and industries that can be considered to offer essential or widely consumed products and services.
Companies like Crest and Colgate use almost the same ingredients, have almost the same selling points and offer almost the same flavors. For this reason, the best strategy to differentiate from the general market for a standard toothpaste option is undifferentiated marketing. A business that influences more people will get better sales and better profits.
Segment marketing is more or less the opposite of segment marketing. Instead of targeting the masses, this type of targeting strategy prioritizes segments of your target audience.
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What makes differentiated marketing successful is the ability to reach the people most likely to buy your product or service with messages specific to each segment.
Another benefit of differentiated marketing is the ability to use unique selling points or core products that focus on the aspects of your product/service that best serve each individual.
You can easily see that differential marketing is a very powerful strategy and one of the most widely used targeting strategies in marketing.
For example, an eco-friendly and sustainable clothing brand can distribute its products for special promotion to customers who care about different interests. One t-shirt manufacturer may target people who are made with organic ingredients, while another may target the softness of the materials, and another may target the greenhouse gases that are not produced compared to other fashion brand shirts. It can be far from here, like men and women, fans of shirt styles, colors, etc.
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Differentiated marketing strategies can be very expensive. It requires more money and work, constant management and change, and a lot of targeted market research. Focused marketing (niche marketing)
Focused marketing is aimed at a small subset of a larger market. This strategy is usually used by businesses that have a strong unique selling proposition that appeals to a specific type of customer.
These niches can also focus on segments defined according to demographic, geographic, behavioral or psychographic dimensions. Niche marketing also benefits from very few marketing channels such as Facebook groups, Tik Tok followers from individuals/accounts or visitors to a specific website.
A good example of this comes from a study published in the Journal of Consumer Marketing regarding the targeting of marketing efforts to millennials. They found that “there are digital marketing strategies that are significantly more effective at attracting Millennials’ attention, repeat website visits, and Millennials for encourage writing online reviews”.
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By focusing on specific distribution avenues and channels, Discovery concluded that they could significantly increase website traffic and reviews.
The main advantages of market-focused targeting is the ability to target a loyal and targeted customer base while also facing less competition. The main disadvantages of centralized marketing are smaller markets and fewer opportunities for growth.
The last type of targeting strategy in marketing is micromarketing, and it is probably the least used. A micromarketing strategy targets individuals or small groups within a niche market. We often call this targeted strategy personalized marketing. It can be targeted (or retargeted) in such a way that each campaign is directed at a single person. Micromarketing techniques can include small niches and further define your targets by specific segments such as age or location.
Using the above 4 examples of niche marketing, we can create more targeted markets that include micromarketing targeting:
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Local marketing can also be considered a branch of micromarketing when locales are specific to small areas such as neighborhoods or even specific streets or locations.
An example would be a small local coffee shop that only targets people in their neighborhood that customers visit as they pass by. This is beneficial instead of spending marketing resources elsewhere where there are many competitors between your location and the customer’s starting point.
Micromarketing is often deployed by businesses to their loyal customers, usually seen through targeted email campaigns. Services and stores also tend to rely on micromarketing in specific areas or to meet the unique needs of a customer base.
Marketers are constantly testing and innovating campaign strategies with different goals and key performance indicators (KPIs). A combination of targeted strategies is often required. A brand awareness campaign may be more effective for an individual business using a focused marketing strategy, but that business may use a micromarketing strategy for a single product offering. Understanding the differences between these types of targeting strategies used in marketing is key to developing highly effective marketing campaigns. A target market is a group of people who are defined as potential customers for a product based on their common characteristics such as age, income, and lifestyle.
How To Identify Your Target Audience
Determining the target market is a key part of the decision-making process when a company designs, packages, and advertises its products.
A new product must meet a need or solve a problem or both. This requirement or problem is probably not universal unless it comes down to indoor plumbing. It may appeal to a certain group of consumers, such as environmentally conscious vegetarians, science buffs, or outdoor enthusiasts. It may appeal to a teenager or a middle-aged professional, a bargain hunter or a snob.
Envisioning your potential target market is part of the product creation and development process and informs its packaging, marketing, and positioning.
Demographics: These are the main characteristics that define your target market. Each person can be defined as belonging to a certain age group, income level, gender, occupation and education level.
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Geographic: This segment is more important in the age of globalization. Regional preferences should be taken into account.
Behavioral: This is the only segment that relies on research on the decisions of the company’s current customers. New products may be introduced based on research on the proven appeal of past products.
Each of the four target markets can be used to determine who the customer is for a new product.
But the corner pizzeria may appeal mostly, but not entirely, to a younger, more budget-conscious consumer, while the old white diner is favored by older folks and families living in the neighborhood. Meanwhile, a new location down the street can accommodate a more upscale, trendy clientele that will travel a fair distance for the restaurant’s innovative menu and fine wine list.
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In every successful case, a savvy entrepreneur consciously considered the restaurant’s ideal target market and fine-tuned the menu, decor, and advertising strategy to appeal to that market.
Today, some products are designed to please everyone. Aveda Rosemary Mint Bath Bar, available at Aveda Beauty Stores for $23 per bar, is for the upscale, eco-friendly woman who places a high premium on quality. Cle de Peau Beaute Synactif soap sells for $110 a bar and is marketed to affluent, fashion-conscious women who are willing to pay more for it.