Targeting Guide #8:

Don’t confuse your current customers with your target customers.

No one can execute a marketing plan perfectly.  Perhaps you have a product or service offering that appeals to customers who are not your target customers.  Possibly some of your distribution attracts customers who are not your target customers.  Or you have an offering that’s priced too high or too low for your target customers.  Regardless of the reason, your brand is going to attract buyers who are not your target customers. 

Consider this graphic, the set space represents all the buyers of a given product category.  The larger circle represents your brand’s target customers, the customers that you are after.  The smaller circle is your actual customers.  Note that only a portion of your target bought your brand.  And some of your customers are not your target end-users.  Think of these customers as being accidental buyers.  This is the result of real world imperfect execution of marketing tactics.  The extent to which your current customers are target customers is a function of how close you are to perfect tactical marketing execution. 

In consumer goods product categories, accidental buyers usually don’t represent a problem for the marketer; they only represent that execution of marketing mix tactics could be improved.  In business to business product categories, accidental buyers may mean that an end-user has purchased and is using a product that is not suitable for their application.  This misapplication may lead to dissatisfaction with the brand, or worse, product liability issues.

Targeting Guide #7

When targeting multiple segments, specify their order of priority:  which is primary, secondary, and tertiary.

This game rule is related to the previous one and comes from practical experience.  In developing marketing mix tactics for multiple market segments, compromises will be made.  Specify which target market is primary, which is secondary, and which is tertiary.  Specification of the priority of market segments will allow you to make compromises in your marketing mix tactics in favor in of your higher priority segments.

Targeting Guide #6

Marketers make their job easier if they target one and only one market segment.

This ground rule is common sense.  If the marketer targets only one segment, the wants/needs of every customer in that segment are going to be the same.  In developing marketing mix tactics, all of the elements of the marketing mix can be optimized to satisfy those wants/needs thereby creating value for target customers.

If a second segment is targeted, then the wants/needs of end-users in the two segments differ to some degree.  In developing marketing mix tactics, what the marketer does for the first segment may be inappropriate for the second segment.  This adds complexity in tactical marketing mix planning.  The marketer must find compromises that are appropriate for both segments.  Often these compromises are not optimal for either segment.

Targeting Guide #5

Focus your scare marketing resources exclusively on your targeted market segment(s).

Once you have identified your targeted market segment(s), devote all of your marketing resources toward moving those target customers toward the purchase of your brand.  Do not waste your scarce marketing resources on end-users who are not your target customers. 

In the real world, marketers often are forced into redirecting marketing resources away from target end-users to non-target end-users.  As an example, there is the opportunity to open new distribution, but marketing research shows that target customers do not purchase at that new distribution.  If sales are going well, the marketer should decline the opportunity.  If sales are not going well, the marketer will probably be forced to accept the opportunity recognizing that it is contrary to the brand’s marketing strategy.  In the real world, one finds that it is impossible to execute a marketing strategy perfectly.  Good marketers will recognize that in accepting the opportunity that they are deviating from their marketing strategy.  Poor marketers will not.

Targeting Guide #4

Targeting is as much exclusionary as it is inclusionary.

Associated Quote:  I know when our businesses have done a good job of market segmentation and targeting when they can tell me who we should not sell to.  Dr. Charles Lillis, former CEO of MediaOne

By identifying the target end-users to whom you are going to direct your marketing efforts, you are consciously making the decision who you are not going after.  The unique brand benefit that you specify in the positioning step of marketing strategy development motivates your target customers to consider your brand.  It’s unlikely that your unique brand benefit would motivate end-users who are not members of your target segment.

Most marketing people sometimes have difficulty in following this marketing guide.  I’ve seen marketers who do have a segmentation scheme, but they target all of the segments identified in the scheme with a single brand.  This is not targeting; it is mass marketing.

Targeting Guide #3

To succeed in the segment, a company or brand must exhibit some strength in serving that segment.

Examples:  If a target market segment has a high degree of price sensitivity driven by low income, the marketer should have the strength of being a low cost producer so that they can offer low prices to their target customers.  If a target market segment is seeking the ego gratification that comes with exclusivity, the marketer needs to have brands that are associated with that attribute.  If the target market segment demands services associated with a physical product, the company needs to have the strength of being a service provider.

Targeting Guide #2

The rules for assessing the attractiveness of a market segment are common sense rules.

Associated Quote:  Common sense is not so common.  Voltaire

Common sense:  It’s better to target market segments that are large rather than small; segments that are growing rather than dying; segments where there are few competitors rather than many competitors; segments where you can make a profit rather than sustain a loss; etc.  Although market segmentation can be extremely complex, the rules of targeting are common sense rules.