Targeting is the next process after Segmentation whereas segmentation makes grouping of customers with similar needs and income, Targeting aims at selecting the segment or consumer groups to whom marketing programme is to be targeted. Targeting or selecting the customer group is essential as it may not be possible to cater to the wish of every segment.
Targeting is selecting its segment to which marketing programme can be effectively implemented by the firm. Firm has to select the segments or group of customers that are sizeable, profitable, accessible and there is potential for growth.
Targeting of segment is based on following factors:
1. It must match with vision and objectives of organization.
2. Firm must have adequate resource in the form capital, technology managerial competence to create and market goods for segment.
3. Segment should offer opportunity for growth and profits.
4. Firm should evaluate the future or potential of the segment i.e, likely changes in future. Change in fashion, technology etc., that may have impact on existing marketing programme.
5. Nature of competition that may have to be managed.
6. Substitute products that may minimise the demand for product. Firm should make SWOT analysis of targeted segment.
After evaluating the above factors firm may decide whether it has to target a single segment or multiple segments.
Patterns of Target Market Selection:
A firm can adopt any one of the following patterns in targeting it Segment:
1. Single Segment:
A firm may choose to concentrate on a single segment. It is also called as concentrated marketing. Firms can operate on large scale serving such segment. Ex- Johnson & Johnson is specialized in Baby and Kids care products (Soap, Shampoo, powder) Microsoft, IBM Computer Industry, Pepsi, and Coke have adopted this universal strategy. They segmented entire global population in one block and same product i.e., food and beverage is marketed to every area.
Benefits:
i. Large scale operation, economy and specialization in single segment.
ii. Better application of available Resources.
i. It may be riskily if the segment or product becomes outdated or saturated competition may reduce market share.
ii. Firms that have limitation of knowledge and organizational abilities may stick to this strategy.
Selective Segment:
Firms may select more than one segment depending on their ability, resources and objectives. E.g. Philips- Lighting, Music System TV, Sony – TV/ Mobile/Sound System, Honda Motorcycle and Car, Mahindra-Car, Truck, Tractor, Two-Wheelers, Jeep.
Firms may select those segments in which they have expertise and resources.
Firms may have less degree of risk as they are operating in more than one segment. If one segment fails they can recover it from other segments. But firms need more resources to enter into different segment. Those different segments may be allied or unrelated. Ex- ITC is in different area like Tobacco, Paper, Hotel, Food.
Product Specialisation:
Firms may specialise in a product but variants of such product are marketed to different segments. E.g. – Maruti is specialized in cars that have different brands catching the different segment. Economy – Maruti – Alto Premium – Swift, A Star, Sx4 SUV – Ertiga Family – Van
Market Specialisation:
Under this category, firms select a particular segment and market variety of products needed by that popular segment. E.g. – Godrej, has sleeted middle class, urban and semi urban families. It is marketing product like (Soap Washing, Bathing soap) Furniture, Electronics, (Washing machine, Refrigerator) Samsung; Electronics – TV, washing machine, Air conditions, mobiles.
Full Market Segment:
A firm -may decide to target Multi segment, marketing range of products to different category of customers. Firms with large resources and ability to operate on global or national scale can undertake such task.
Full market operation may be undertaken with undifferentiated or differentiated approach.
(a) Undifferentiated Approach:
In this approach firm market limited range of product, classifying entire population in one or limited segment. Ex- Microsoft, IBM globally markets its PC’s laptops without much differentiation in its marketing approach to global customer. Similarly Pepsi and coke adopt the same approach, Mercedes Benz, BMW the luxury sedans or cars market their product globally keeping entire global customers as one segment.
Mercedes has different series of cars like e-class, c-class for each market (nation). Amul is marketing milk products, chocolate, Ice cream in India treating all customers as one segment. Similarly Cadbury is doing it globally.
Firms will be marketing variety of products to different segments. This can be termed as ‘conglomerates’ doing variety of business to meet needs of different category of customers. Ex- Tata has more than 100 companies marketing varieties of brands. It is said from salt (TATA) to Computers (TCS) large range of products, Trucks, car, steel hotel, wide range of products are served to cater to different segment.
Similarly Reliance is in textiles, power, communication, Oil and Natural Gas catering variety of segment.
Firms with huge resources, managerial ability vision and objective of growing globally will have this approach towards marketing.
It is the final stage in segmentation:
a. Segmentation classifies customers in groups who have similar needs.
b. Targeting is selecting particular segment or group of people for marketing.
c. Positioning- determine how selected segment is to be marketed with the product.
Positioning is presenting the concept of product to the prospective customer in a manner that is perceived or imagined by him. In fact positioning is creating a favorable image of the product that catches attention of people. In brief it is highlighting the USP i.e., Unique selling proposition.
USP means stressing or positive qualities of a product like better quality, reasonable price, better service durability etc. It is parameters or features or qualities with which product are to be placed in the mind, on the shelf/rack in a shop so that it ends up in the basket of a customer.
Positioning is subjective or individual perception. Each person may have his own individual opinion about the product. Firm must be in a position to create a positive image about product. Highlighting on positive features of product that can catch the attention of Prospective costumer. Such feature may be like quality, price, use, service etc., of the product.
But the feature highlighted must differentiate the product with the competitor’s product. Firms must position that product through product differentiation i.e., presently the product differently from the competitor, so that people easily identifies each brands or product. Firms have to adopt a different marketing mix that differentiates its product with its competitor.
It may be in terms of:
i. Product:
Quality, Quantity, Size, Shape and Colour.
ii. Price:
Reasonable, premium, discount, offer, installment hire purchase, exchange offer etc.
iii. Promotion:
Advertising samples, incentives to distribute etc.
Successful positioning defines a product in terms of how a customer perceives or imagines the product. Ex- Xerox, is understood as Photocopier, Pepsi for Soft Drinks, Honda for Motorcycle, Dalda for Desi Ghee, Maruti for Car. Above brands are successful in positioning. The brand itself is taken as product. Every common man even an ‘Illiterate’ person identifies the above brands with the product.
Essential Qualities of a Successful Positioning:
Final journey of a product is its consumption. It is not enough, if the product is manufactured, what is important is product must catch the attention of customer. He must be persuaded to buy and consume it.
A successful position has following elements:
1. Relevance:
Positioning style adopted should be relevant to the product Utility of product and its relevance to customer should be communicated to people. E.g.- FEVICOL – Jod, Fair and lovely are effective messages that effectively communicate relevance.
2. Distinct:
Differentiation and distinctiveness should be the criteria. Market is full of products that are offering competition with one other. People must be in a position to differentiate, identify, recognize and be attracted by the product. It may be packing, placing on the shelves, salesman style, product inside of advertisement etc., E.g. – Amul message – the taste of India. Milk products chocolate, Ice – cream has positioned itself with quality, reasonable price, Indianness and with funny and catchy advertisement.
3. Coherence:
Each feature of the product should match every aspect of marketing mix with one another. A product which speaks of quality, if has poor packing priced low, with dull Ad campaign or product itself has poor quality, it will create a poor image about the product. Every claim that is made about the product should be true and match with product.
4. Commitment:
Market is full of competition, with many brands, competing. Positioning should help to stay, survive and win the market. Initially it may be difficult to catch a large share of market. A Product takes its position in the market gradually. The marketer must have patience to wait and commitment to stay in the market. Frequent changes in the positioning of a product. E.g. – Change in quality, quantity price, Ad campaign, packing etc., will create confusion in the mind of people.
5. Durability:
It takes a longtime to develop a brand and position it. Public will not be easily and immediately convinced about new product. They take their own time to consume and develop positive attitude about the product. Product must be so positioned (with features) to stand the test of customers. The product, its idea etc., must be durable to stay in the mind and on the shelves of shop.
6. Clarity:
Every aspect of the product must be clear. The quantity, price, name, advertisement, availability, everything must be clear. None of the concept should be confusing. Ex- Difficult name, confusing packing, misleading advertisement can place the product in poor position.
7. Truthful:
Every aspect of product must be true and reliable. Poor quality, duplication, false promises, lack of service will harm the image of the product.
Positioning Approaches:
Marketer can adopt following approaches in positioning his product:
1. Positioning by Customer Benefit:
This is the common method of product positioning. Distinct or special features of product are identified and they are highlighted it becoming USP i.e., Unique Selling Proposition. Ex- Toothpaste – Whiteness, Freshness, Gum care etc., Two wheeler- fuel efficiency, durable, easy maintenance (repair) etc.
2. Positioning by Price Quality:
Marketer may adopt the approach or position on quality. Products that are luxury Ex- Gold ornaments, luxury cars, Air conditions etc., the premium quality is highlighted. Manufacturer may also compare price with quality. This normally happens with products in low priced category. In such case manufacturer stresses on better quality at reasonable price.
3. Corporate Identity:
Firms that have reputation and goodwill launch a product on the strength of firm’s name. Ex- Tata, Honda, Sony, Reliance. Firm itself has established position in the market. Any new product introduced is launched under the corporate identity, stressing the name of firm. e.g. – a Tata product a Honda Product.
4. Brand Identity:
Regular and well established brands are products are positioned on strength of their brand name, Ex- Boost, Colgate.
5. Product User Approach:
User of product is positioned to communicate about its product. Ex- Sachin Tendulkar Boost, Shahrukh Khan Fair and Handsome. Superstars in the field film, sports are taken as brand icons to position and market the product.
Similarly regular users. E.g. – a carpenter promoting Fevicol, a Truck driver an oil, a Mother on healthy food.
6. Competitors Approach:
This style of positioning highlights unique and superior features of the product in comparison with competitor’s product. It is a kind of offensive strategy to show how the product is superior compared to competitor’s product.
7. Occasion and Time:
It highlights the occasion and event and the utility of product to celebrate the occasion, e.g. – Jewellery in Marriage season. Diwali: Gifts, Chocolates
Customer Profile:
Phillip Kotler has defined marketing as “Societal process by which individual and groups obtain what they need and want through creating offering and freely exchanging products and services of value with others”.
Marketing starts with creating desire in the minds of customer, designing and delivery of such product that results in customers delight Peter Drucker, the management guru has said (Marketing) is the whole business seen from the view point of it final result that is from customers point of view.
Customer is the central focus of every marketing activity. To be successful in any kind of business, it is necessary that one must know who his or her customer is. Customer profile, i.e., knowledge and information and his data base will help to serve the customer with the goods and services he desires and thereby make a profit.
Customers differ with one another, even within a family Husband and Wife, their parents, Children everyone is different with other in physical, social, psychological and other aspects. Their personalities differ, they will have different needs. Similarly a customer of America, Africa or Antarctica differs. An American, educated with better income cannot be compared to a poor African or a person living in cold Antarctica region. Their needs differ. It is said marketing is an art of selling hair oil or comb to a bald.
A successful marketing campaign knows who is his customer, what he wants, (obvious that a bald always wish long silky hair) create desire in him, and deliver the desired product.
Successful marketing always depends on defining the customers or the customers profile and determining marketing strategy to match the customer. Every customer is an individual, he differs with others. Understanding differences and needs is the beginning of marketing.
Customers profile can broadly be classified under:
1. Gender- Male Female
2. Age- Infants, kids, adolescent, Young, middle age, old.
3. Income- Poor, Middle Income, Rich.
4. Locality- Rural, Urban, Metro.
5. Ethnicity- African, Asian, European.
6. Religion- Hindu, Muslim, Christian, Sikh, Jain, Etc.,
7. Language- Hindi, English, Marathi, Telugu, Kannada, Urdu etc.
8. Employment- Business, Profession, Job, Agriculture, Employed, unemployed.
9. Social Status- Unmarried, married, Divorced, Single.
10. Family Status- Joint, Nucleus.
11. Economic Development- Developed, Developing, Backward.
12. Temperature and Climate- Hot, Cold, Moderate.
Customer in each profile or segment differs in their need and demands. Each profile can be further subdivided to design micro marketing strategy.
Ex- An Urban, Male, Middle income, persons needs may differ with similar person in rural area. A housewife may have limited needs as compared to a working women. A joint family may need different kind of goods compared to small nucleus family. Consumption pattern of an average American may be completely different compared to an average Indian. Marketing programme have to be determined depending on customer’s profile.
Jeans, Mobile fast food high powered and speed bikes may be desired commodities of an urban middle income college going youth. A middle income housewife wishes silk sarees, Jewellery, Well equipped kitchen. A working women on the other hand depends on baby-sitting for her kids a servant to work at home, a two wheeler to go to office. Comfortable and convenient dress a well secured home or flat.
Religion and customs also have impact on consumption pattern. A Hindu has different culture (Food, Clothing living style) festivals compared to other religion. People belonging to each community have different life styles, culture that has an impact on consumption habits. Marketing has to consider these aspects to deliver those goods.
Small Roads, Crowded Traffic, Poor Income Levels in India, demand small but rough and tough Vehicles (Two or four wheeler). Developed or Western World with Developed Infrastructure, Roads, Income levels can accommodate Luxuries Vehicles like Mercedes, Volvo etc., that may not be a common product in India.
Customer Profiling:
It is building up profile or information about the customer. It includes collecting information about the customer, particularly his consumption habits. Data base of customers is built and updated regularly, so that firm is in a position to understand his needs, and how to deliver those needs through effective marketing.
Information regarding customer may be collected through an:
a. Analysed market survey or research.
b. Collection information at point of sale (POS) whenever customer visits for shopping.
c. Referring to research publications that are carried out by any professional organisation.
Following information is collected to develop the data base of customer:
a. Name, Address, contact numbers, e-mail id etc.,
b. Family profile, members, age, group etc.
c. Status of employment; business; profession, service etc.
d. Wish list- Item of merchandise they expect in the store.