The strategy of targeted marketing emerged as a result of tightening competition in the industry markets. The increase in the number of players led to an increase in supply and an important expansion of the range, new opportunities for product acquisition appeared, markets filled with similar products - substitutes. Answering a question What does Targeted Marketing mean, it is necessary to say that this concept appeared in opposition to the concept of "mass marketing", new definitions such as "target market", "differentiation", "market niche" also appeared.
Target Market Definition
The following definition explains targeted marketing. This is a form of marketing activity of the company, during which the seller clearly defines the boundaries of market segments, selects one of them or several target segments and then develops targeted marketing techniques for each of them, taking into account the choice of commodity items that will be most effective for all segments of the market. Target marketing provides for the mandatory holding of three events:
- market segmentation,
- selection of target segments on the market,
- product market positioning.
Identifying Your Target Market
After analyzing the characteristics and desires of consumers, consumers' behavior patterns and environmental factors of an enterprise, it is necessary to select the target market, that is, the markets to which it will be oriented and for which it will create the appropriate strategy.
- A potential market is a collection of people with similar needs in relation to a particular product or service, contented resources and the ability and willingness to buy.
- The target market is the point of application of marketing, an attractive segment of the market where the company concentrates its own activities.
Regardless of the general types of markets in which the company concentrates its own efforts, the management of the marketing department of an enterprise is obliged to define precisely the target markets. To identify the target markets, it is necessary to use a global approach to the market and segment it. The allocation of target markets is one of the main tasks of marketing and can be carried out on the basis of differentiated and aggregated approaches. In the latter situation, the market is segmented, the goods are positioned and the target segments are selected.
Researching Your Target Market
Identified on the basis of various characteristics of the market segments should be investigated in terms of the most appropriate for the service by the company. Consequently, segmentation creates the basis for choosing a target market. In the process of formation of the target market, enterprises can focus on market niches, representing a segment of the market for which the product of the given enterprise is the most optimal. It is also possible in particular to choose a successful, well-proven product and produce additional or related products to it.
How Can Businesses Use It?
The advantages of targeted marketing for the company are obvious:
- this strategy allows the company;
- to avoid direct competition with market leaders;
- to gradually strengthen its business and establish itself in the market through leadership in satisfying niche needs;
- to win narrow segments of consumers, which in the aggregate can constitute a good market share;
- and also to form the necessary investment and resource base for entering larger segments.
Targeted marketing strategy is an effective tool. The companies that use it get serious competitive advantages. This strategy boldly walks the planet and is gaining more and more new frontiers. The speed with which this strategy extends allows asserting that companies that work on other strategies or without them at all will leave the world of business very soon. It is possible to talk about a time span of 5-10 years. All companies that will not be able to reorganize during this time to use this strategy will be on the verge of departure. Of course, they will exist at the expense of inertia for some time, but their positions on the market will deteriorate significantly and will continue to deteriorate.