Targeting of specific segments in marketing is important for creating effective marketing plans because very few, if any, products can satisfy the needs of all consumers. After identification of unfulfilled needs of people or businesses (whether B2C or B2B). Designing the marketing strategy involves the following steps:
* Identification of markets
* Targeting specific segments
* Positioning the product/service
*Identification of segments:
The marketing strategist must now study the potential users of the product/services and segment them based on their lifestyles, needs, behaviors income etc. this increases the knowledge of their specific requirements, as opined by Belch and Belch(2010) in their book “Advertising and promotion: an integrated marketing communication perspective”, the more marketers can establish this common ground with consumers, the more effective they will be in addressing the requirements in their communications programs and informing and/or persuading potential consumers that the product or service offering will meet their needs. Market segmentation is basically dividing up a market segment into distinct groups that have common needs and will respond similarly to a marketing action. It should also be noted that the more the market becomes divided, the fewer consumers there are in each segments. Thus a key decision is how far should one go in the segmentation process? Where does the process stop? (Belch and Belch, 2010) There are various in exhaustive bases for market segmentation, this list describes a few: Geographical segmentation: This involves the segmentation of markets based on different geographic units. An example is an internet service provider in Nigeria that currently targets only residents of Lagos state, Nigeria and not the entire country.
Psychographic segmentation: The process of dividing the market on the basis of personality or lifestyle, beliefs, values is psychographic segmentation. The activities, interest and opinions of consumers help determine the lifestyle of the consumers.
Demographic segmentation: This is the segmentation of markets based on variables such as age, sex, social class, family size, education, income etc. examples are products that are designed for kids only, female only or upper class citizens. The various segments can also be formed by combining one or more basis of segmentation.
Targeting specific segments:
After the identification of the unfulfilled needs of consumers, design of product/service and segmentation of the market, the marketing strategists must now choose the target market(s) to focus on and thus craft varying positioning strategies for each market. The target of specific market is the hub of marketing strategy as it has an overwhelming influence on the success of the marketing plan/strategy.
Choosing the market to target is a decision based on consideration of some factors:
* size of the market: The organization must ensure there is appreciable financial return on investment (ROI) before deciding to target specific markets, an example is a firm A that decides to target a segment that is easy to sell to but offers only 20,000 dollars worth of sales in 7 years and firm B that targets a segment that offers 2,000,000 dollars worth of sales in the same period of time.
* The growth of the market: The segment must also show potential for growth and not stagnancy. This is important for the long-term profitability of targeting such segments.
* The competition in the market and the organization’s ability to compete: The competition in the market segment and the firm’s ability to engage the competitors must be considered when choosing the target market.
* The organization’s ability to market to the segment: The firm’s ability to reach the target market through its various promotional programs and media should be considered before choosing the segment to target.
Positioning strategy:
After the identification of the target market, the product/service is then positioned in the heart of the target market, using different positioning strategies, these are positioning based on the product/service attributes and benefits, price and quality, use or application, product class, product user, by competitor etc.
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