Having a deep understanding of who you want to sell your products and services to is crucial to both marketing and business performance. Get your targeting right and you will reap the rewards. Fail to successfully segment your market effectively and you will struggle with penetration, education, and conversion.
What is target marketing?
Target marketing is the process of segmenting your market into different groups based on critical factors (such as wealth, behaviors, or location) and tailoring your marketing activities to these groups to improve marketing performance.
Layering information about your current customer base and their purchasing habits can also be an important guide in deciding future marketing strategies.
What is marketing segmentation?
Market segmentation is the specific process undertaken to identify groups in your target market that would be more likely to purchase your goods or services.
There are four main types of marketing segmentation; demographic, psychographic, behavioural and geographic, all of which can be combined to define your ideal client profile (ICP).
Target marketing and segmentation in action
We have already explained that effective targeting of your audiences can help boost your marketing and business performance. In the below scenario we look at how targeting and segmentation work hand in hand to deliver success.
In this scenario you own a national women’s shoe brand. Immediately there are some obvious demographic and geographic targeting decisions that can be identified. Your market location is Australia and your target market is women. And yet, this audience is still far too large and costly to effectively target, so you must go deeper with your analysis.
By studying your previous customer purchase history you will know that women aged 25-44 have the highest propensity to purchase your shoes. On top of this you will know regionally which parts of the country have historically performed the best (and which present a new opportunity perhaps). Our segmentation is taking shape.
The final step is to utilise a technological solution, such as Experian’s award-winning socio-demographic segmentation tool, Mosaic. Mosaic splits the national population into 14 Groups and 51 Types so you can identify your target audience quickly and easily.
Utilising a tool such as Mosaic you can understand which women within your age groups have the correct wealth level to purchase from you. You can understand in which towns, streets and households your audience lives. You can understand buying habits and where to put physical sales locations. Most importantly you can identify where other women, who look like your best customers live and shop.
Getting started with target marketing
Below we have listed the steps you can take to define your target audience:
- Define your operating territory. e.g. Australia or Sydney
- Define your demographic criteria. e.g. Gender, Age and Income Level
- Define your psychographics. e.g. Social Grade
- Define your behavioural habits. e.g. Purchase channels
- Create your target segments based on points 1-4
- Define your messaging by segment
- Define your marketing activities where you are most likely to find your target audience
If you cannot build the answer to any of the steps above then or lack insights to build your own segmentation, then a tool like Experian Mosaic could be the answer.
Get in touch with the team today to discuss how Experian could help you build a better target marketing plan.