Before you can craft a killer message to send as part of your integrated marketing campaign, you have to know who you’re trying to reach. As you begin this module, always remember one simple concept: people are different. A message that turns one person on may leave another cold. And, of course, not everybody is likely to be interested in the idea, product, or service you want to sell.
Before marketers can decide what a campaign should say, they need to devote a lot of thought to identifying the target audience of the message. Target marketing is the process of identifying the types of people who are most likely to want your product and then tailoring your efforts to satisfy their unique needs. This is accomplished through segmenting and targeting.
Segmenting subdivides the population to help you think about who are and are not the potential customers for your product and the potential audience of your advertising. Targeting picks the segment(s) for the campaign that will be the focus of the advertising. This process gives you a framework for understanding:
• Who are your customers?
• How many customers are there?
• Where do they live?
• How do they spend their time?
• Why do they buy?
Segmentation is the process of dividing a larger market into smaller pieces based on one or more meaningful and measurable shared characteristics. It’s crucial to slice up the pie so you can focus your resources on customers whose needs you have the best chance of satisfying.
Segmenting the population gives you a concrete vision of your potential customer. For example, targeting upper-income unmarried men with a college education gives you a more specific vision of the intended audience than does simply advertising to “people.” Segmenting the population provides focus and specificity on those people most likely to buy your product. It’s better to find the five million people who are 80 percent likely to buy than it is to find the 80 million people who have a 5 percent chance of buying.
Segmenting the population also lets you estimate the number of people in a given category (such as “Affluent Retirees”), which gives you an idea of your potential market size. Knowing how many potential customers you’ll have influences your sales estimates, your total marketing budget, and the advertising media you use. For example, if you’ll be targeting Hispanic consumers in the New York City market, your total market size will be 4.8 million people.1Stepler, Renee and Lopez, Mark Hugo. “Ranking the Latino population in metropolitan areas”. Pew Research Center. September 8, 2016.
Targeting increases the cost-effectiveness of marketing. Most advertising and promotional outlets have a cost that is a strong function of the amount of exposure (e.g., the number of people who see the ad) regardless of whether audience members are potential customers or not. Targeting helps define who the customers are.
As you begin to segment audiences, give consideration to populations that:
• Have the necessary buying power (they can afford what you are selling).
• Are likely to buy your product or service.
• Are likely to be attracted to your marketing message and medium.
An effective target market is profiled using a strong combination of demographic, geographic, psychographic, and behavior-based segmentation.
Some ideal properties of a good target audience are:
• Measurable: The target audience can be easily and accurately identified and assessed.
• Accessible: The target group must be reachable via advertising and promotion.
• Profitable: The target group must have sufficient size, a willingness to buy, and an ability to pay.
• Distinguishable: The target group must provide a clearly differentiated segment in terms of percentage of potential customers and coherence of response to potential promotional messages.
Demographics are measurable aspects of a population. Each key variable is usually defined in terms of a small number of categories or ranges. For example, age data might record the number of thirty- to forty-year-olds in aggregate, rather than separately tallying each age group of people who are thirty, thirty-one, thirty-two, thirty-three, and so on.
These are widely used demographic measures:
- Household income
- Education level
- Marital status
- Sexual orientation
Most geographic segmentation schemes use definitions the government has created for census, postal, and economic forecasting purposes. On a basic level, these include states, counties, cities, and ZIP codes. Other forms of geographic segmentation include:
Metropolitan Statistical Areas (MSAs)
The U.S. Office of Management and Budget defines 363 MSAs in the United States. MSAs are defined using census data at a county level (or a group of economically linked contiguous counties) with at least one urbanized area of 50,000 or more population. For example, with 19 million people, the “New York-Northern New Jersey-Long Island” MSA is the most populous in America.
Designated Market Areas (DMAs)
DMAs are markets in the United States that are within range of a particular broadcast television station. The term was originally defined by Nielsen Media Research to identify TV stations whose broadcast signals reach a specific area.
Some products are specific to or more prevalent in areas with a specific climate. For example, Minnesotans probably don’t care about buying surf gear in the winter, and Floridians probably aren’t too interested in ads for ski gear.
Psychographics refers to dimensions that segment consumers in terms of personality, values, attitudes, and opinions.
While demographics can divide people along specific (often quantitative) dimensions, psychographics captures the reasoning and emotion behind people’s decisions. This information also enables advertisers to capture the themes, priorities, and “inside meanings” that a specific taste culture identifies with.
For example, Svedka Vodka targets urban party people who are out drinking until three o’clock in the morning three nights a week. This target market is irreverent, and Svedka’s ads speak their language. The ads feature futuristic imagery and lines like “Svedka says ‘thank you’ for making the gay man’s fashion gene available over the counter in 2033.”2Dan Heath and Chip Heath. “Polarize Me,” Fast Company, April 2007, 59.
Don’t Fall Into This Trap
Many students develop target audiences that are very wide and broad. Their thinking is that the larger the target audience, the more product they can sell. This approach conflicts with the strategies and goals of integrated marketing, which require very well-developed and focused target audiences. As a target audience gets larger, its members likely have less in common. This means that they are less likely to be reached via the same marketing channels and react to the same messages. Avoid trying to be “everything to everybody”. Those who earn the highest grades in this class tend to develop highly segmented target audience profiles.
Kick It Up A Notch: Name Your Target Audience
An ideal target market contains a unique blend of demographics, geographics, and psychographics.
Often, marketers will create catchy or memorable names, labels, or acronyms for each target audience. For example, DINKs (double income, no kids), are a name used for the target audience of yuppie products like expensive roadsters and exotic vacations. There are even DINKWADs (double income, no kids, with a dog), who are like DINKS but would add in lots of treats for a pampered pooch.
Department store Bloomingdale’s named one of its target audiences “Yummy Mummies.” These are “women age thirty-five to forty-five who have gained weight after their babies but don’t want to look matronly. They are affluent, suburban, and casual yet fashionable. Yummy Mummies think classic sportswear like Jones New York is too formal but contemporary sportswear like Juicy Couture is too young. These moms want clothes that look pretty and feminine and have flair but offer a generous, not-too-tight fit.”3Elizabeth Woyle. “What Do 35-Year-Old Women Want?” BusinessWeek, April 2, 2007, 66.
Target Market Segmentation by Mark Parfitt, 2020 is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License. Parts of this text were adapted from Launch! Advertising and Promotion in Real Time by Saylor Publishing, 2012.