Editor’s Note: This blog was originally published on June 8, 2018. It’s been updated as of the current publish date to reflect the most recent insights. This article is also part of a series that explores the impact the COVID-19 crisis is having on the business world. Each article is designed to help you navigate your marketing strategy during this time.
The last few months have been extremely difficult for the entire global community as we adjust to a new normal amid the coronavirus pandemic.
From a personal point of view, many of us are practicing social distancing by staying inside, cancelling plans, and avoiding crowded spaces.
From a business perspective, the majority of people are working from home, uncertain of when we’ll be allowed to return to our usual place of work.
Businesses are facing a multitude of challenges from changes in demand, retail closures, supply chain issues and staff retention to name just a few.
Importantly, now is the time to consider the impact this pandemic is having on our businesses and what adjustments need to be made, in the short term at least, to ensure survival.
This process involves a review of our marketing strategy, beginning with target market definition.
Defining Your Target Markets
Defining your primary and secondary target market with target marketing strategies is the most important decision you will make. Which is precisely why we deal with it first!
It is this decision that has the potential to make or break your business. By gaining a deep understanding of your primary and secondary target audience, you are essentially mapping the course for your future marketing decisions.
In the case of a pandemic, it is quite likely that your offer, be it product or service, has had to change in accordance with government restrictions.
In the case of a manufacturer, it may be a completely different product such as protective equipment, clothing or hand washes.
In the case of wineries, restaurants and other licensed outlets, it may be a new or improved takeaway service, supported by ecommerce.
In any case, such changes may result in new customers or a more tightly defined group of existing customers.
So, defining your target markets may mean redefining them in accordance with changing circumstances.
A Couple Of Target Marketing Strategies To Get Right
- Commit to investing significant effort (time, research, strategic thinking and analysis) into defining the most attractive and profitable target markets for your brand.
- Commit to this defined target market and use these decisions to shape all other marketing decisions (i.e. all other marketing, and sales related decisions that follow).
The Who, When and What of Target Marketing Strategies?
An article on Target Market Selection would not be complete without at least a couple of old chestnuts (read clichés) such as:
You can’t be all things to all people
To me, this statement summarises the futility of striving to utilise limited marketing funds to present a brand or business in a way that caters to all customer groups.
I think a variation of a quote by Abraham Lincoln says it a little better:
“You can please some of the people all of the time and all of the people someAbraham Lincoln
of the time, but you can’t please all of the people all of the time.”
To me, Abraham Lincoln’s saying draws our attention to the variations in consumer’s needs, wants and behaviours. These differences make it difficult to please all customer groups with the same brand offering.
Those of you who have participated in any of our Baker Marketing Strategic Marketing seminars or workshops would have heard me share the above as I strive to highlight the need for a clearly defined target marketing strategy.
Another quote that comes to mind when discussing target marketing strategies is:
“He who wants to protect everything protects nothing.”From ‘The First and Last’ written by World War two hero Adolf Galland 1954
To me, this last quote nails the overriding reason why you must do your best to define a clear and relevant target market. A definition that comprises of the most attractive and profitable customer groups for your business.
If you do not define a clear target market, you risk spreading your marketing resources too thinly or stretching your brand too far. Either of these outcomes can be disastrous for sales and profits.
So Please Invest Wisely In Your Target Marketing Strategies!
Invest appropriate time, research, analysis and energy in selecting the most attractive target markets.
Then use this target market decision as a significant benchmark for all other marketing decisions.
By investing the appropriate time and assets into your target marketing strategies, you will not only shape the personality and voice of your brand, but you will give direction and clarity to all future marketing decisions you will need to make.
How Do You Define The Most Attractive Or Profitable Target Markets?
Like most essential and strategic marketing decisions in your business, there is a need to do some research, collate information, analyse and review this information and then set some priorities.
Sounds all well and good, but how do you go about achieving the right result?
This is where a structured approach to marketing planning can be helpful.
To give you a starting point I have outlined the key steps that I recommend to our private clients when assisting them with their businesses target marketing strategies.
A Structured Approach To Target Marketing
I have summarised the most important steps in defining the target markets:
- Market Research
- Segmentation and Analysis
- Defining Priorities
- Customer ProfilingFocus
Target Marketing Strategies 101
Naturally, to arrive at a concise summary of such an important topic I have had to rationalise the information that I share with you.
The topic of defining your target markets is worthy of semester-long university subject.
Most business owners and operators that I know do not have the time or the patience for such a ‘War and Peace’. So, I recommend that you follow the steps that I have outlined below instead.
5 Steps To Defining Your Target Markets
Step 1 – Market Research
Research your marketplace and customer groups.
This is where you investigate your marketplace and collect as much relevant and useful information as you can.
Your first step should include some desktop research
- Use the internet to find out as much as possible about your industry, products/service and the people who tend to be attracted to it.
Followed by some close examination of your competitors
- Mystery shopping your competitors
- Analyse their digital presence
- Use software to see what digital marketing strategies they are utilising
A bit of self-analysis is also beneficial (I recommend Mystery shopping your own business).
Key information sources include:
- Competitor websites and mystery shopping
- Industry bodies, Government departments and other information portals
- Customer research and if possible consider asking your customers for their opinion.
- This is another reason why it’s so important to build an email list of customers.
- Pricing and product range review (review competitors and your range)
- Numerous other sources of information that may be specific to your product/service category
Step 2 – Segmentation and Analysis
Segment your customers into homogenous groups and analyse attractiveness
This next step involves two parts:
- Market Segmentation
- Segment Analysis
Firstly, Market Segmentation, which requires breaking down your entire marketplace into similar segments. (i.e. market groups with similar characteristics).
When segmenting your marketplace, it is useful to separate and categorise your different customers into groups of customers that have similar characteristics.
Characteristics such as:
- How they use your products/services
- Make decisions
- Education/social/geographic factors
- Exposure to marketing messages
Marketers call these groups of customers with similar characteristics ‘market segments.’ This grouping or segmenting then allows you to move on to the second part of Step 2. Segment Analysis, which is where you review and analyse relevant available information. (i.e. your market research from Step 1 above).
This review and analysis help you decide which market segments are more attractive and profitable for your business. (i.e. prepare us for Step 3 below).
Step 3 – Defining Priorities
Identify the most attractive market segments.
Step 3 is where you complete the all-important process of evaluating each market segment to rank them regarding attractiveness, profitability and overall importance and priority for your business.
I find the following criteria useful when evaluating market segment priorities for our clients:
- The total potential for profit. (i.e. what is the full potential of a market segment versus how much profit are you currently generating from it)
- The total potential for conversion. (i.e. how easy or difficult will it be for you convert prospects to customers when targeting a particular market segment)
- The total potential for long-term loyalty. (i.e. what is the potential for a long-term income stream either directly from the market segment or referrals associated with the market segment)
Your overall assessment of the above three criteria then forms the final ranking of your market segments.
There is a commercial trade-off associated with many business and marketing decisions, and your selection of target markets is no different.
It is critical that you prioritise your market segments and define the most attractive and profitable segments as being your primary, secondary and tertiary target markets.
When it comes to marketing during a pandemic or financial crises, a particularly important criteria, beyond need identification, will be the willingness and ability to pay for your goods or services across different price points.
Your target markets may well change across different price points with different offers at different price points being required to cater for differences in financial circumstances.
Step 4 – Customer Profiling
Develop a detailed description of your target markets
Customer profiling (also known as buyer personas) is merely creating a detailed picture (or profile) of your primary target market.
I recommend that clients start to develop a detailed description of what a ‘typical’ target customer would look like and how they would behave.
Creating a profile of this target customer would include describing attributes such as:
- Income / Employment status
- Social status
- Geographic location
- Perceptions, attitudes and values
I even recommend that you go as far as give your target market a name. Yes, that’s right name them.
By selecting a name that they feel is in keeping with the age, sex and status of their target customer, it assists them to build a much more vivid picture of their target market. Moreover, once they have this picture in their mind, they can more effectively decide how to market to them individually.
It also makes the process more efficient and effective when considering a change or decision in the context of your target market because you can ask yourself or your team:
“What would Margaret or John think of this?”
All involved will instantly know that you are referring your Primary Target Market and the use of the profile name will help to conjure up a picture of who that person is immediately.
Step 5 – Focus
Focus your marketing resources on your defined target markets.
This last step means that I am asking you to commit to your target market decisions and to then focus your marketing resources, money, time, brain-space and energy on your defined primary and secondary target markets.
If you have completed steps 1 to 4 thoroughly, you will have identified specific market segments that are more attractive and profitable for your business.
Therefore, if you have limited marketing resources (money and time), which is obviously more likely now than ever before, then it makes sense to focus all or the majority of these resources on targeting these most attractive segments (i.e. your primary target market).
Target Marketing Strategies That Shape All Other Marketing Decisions
This means that when making all other marketing, and sales decisions you reflect on your target marketing strategies and personas and ask yourself questions along the lines of:
- Would Margaret/John like this decision/change/addition?
- Is this decision/change/addition relevant to Margaret/John?
- What would Margaret/John think of this decision/change/addition?
- How would Margaret/John respond to this decision/change/addition?
NOTE TO SELF: If the answer to any of the above four questions is negative – think very carefully before proceeding!
Make No Mistake In Your Target MarketingStrategies!
Defining your target markets is the most critical strategic marketing decision you will make for your business and brand. This applies to both the” good times” and most certainly, the circumstances we find ourselves in today.
The quality of decisions made regarding target markets impacts dramatically on your sales, profits and brand value, both now and in the future.
Failure to commit specific target market segments means you risk spreading your resources too thinly or targeting market segments that will not be profitable for your business.
The team at Baker Marketing have a wealth of experience in marketing strategy and a number of us have lived and worked through times of economic and financial crises.
If you are ready to get strategic about your marketing give us a call on 08 8352 3091 and talk to a senior marketing consultant today.
Click here to find the next article in the series titled ‘What Makes Your Business Attractive to Customers During COVID-19 and Beyond?”