Chapter 5: Targeting and Positioning
Criteria for Effective Targeting
Stepping into the world of targeting might feel a tad overwhelming initially. With so many segments and so many possible markets, how does a company determine where to cast its net? Well, it's not about blindly throwing darts on a board. Effective targeting is a mix of art and science, and there are specific criteria that businesses should consider.
Measurable: The size, purchasing power, and characteristics of the segments must be measurable. It's crucial for businesses to understand the potential value of a segment. Let's consider Coca-Cola. They're not only tracking global soda sales but also breaking down those sales by region, age groups, and even specific events. This detailed data helps them measure where their products are most consumed and by whom.
Substantial: The segments must be large or profitable enough to serve. If a segment is too small, it might not justify the resources required to cater to it. High-end luxury brands like Rolex or Lamborghini, while catering to a smaller market segment, ensure that the profitability from this niche segment is substantial enough to warrant their focused attention.
Accessible: It’s not just about identifying a segment; companies must be able to effectively reach them. This includes considerations like distribution channels and communication methods. Amazon Prime, for instance, targets consumers looking for fast shipping, exclusive access, and online entertainment. But this service is only offered in regions where Amazon can guarantee the speedy delivery and streaming infrastructure.
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Differentiable: Segments should respond differently to different marketing strategies. If two segments react similarly to a campaign, they might as well be a single segment. The same parent company owns Toyota and Lexus. However, Toyota targets a broader audience looking for reliable and affordable vehicles, while Lexus appeals to consumers seeking luxury and sophistication. The marketing strategies for both, thus, are distinctly different.
Actionable: After identifying and understanding a segment, the company should be able to devise effective programs to attract and serve the segments. Nike recognizes that they have a segment of consumers passionate about sustainability. In response, they introduced the "Move to Zero" campaign, focusing on products made with sustainable materials and processes.
When assessing these criteria, businesses need to think about the long game. Some segments might be small now but hold growth potential. Others might seem tempting due to their size but may not align with a company's brand or values.
Targeting provides direction, ensuring efforts aren’t scattered or wasted. But to navigate successfully, businesses must ensure their chosen path (or in this case, segment) ticks these boxes. After all, precision makes all the difference.
