{"id":567,"date":"2015-09-09T21:13:54","date_gmt":"2015-09-09T21:13:54","guid":{"rendered":"https:\/\/courses.candelalearning.com\/waymakerintromarketing1xmaster\/?post_type=chapter&p=567"},"modified":"2016-02-18T17:10:13","modified_gmt":"2016-02-18T17:10:13","slug":"reading-targeting-and-the-marketing-mix","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/clinton-marketing\/chapter\/reading-targeting-and-the-marketing-mix\/","title":{"raw":"Reading: Targeting Strategies and the Marketing Mix","rendered":"Reading: Targeting Strategies and the Marketing Mix"},"content":{"raw":"

Using the Marketing Mix to Reach\u00a0Target\u00a0Segments<\/h2>\r\nOnce target segments are identified,\u00a0the marketing manager selects a targeting strategy that will be the best fit for reaching them. Targeted marketing enables\u00a0the marketing and sales teams to customize their message to the targeted group(s) of consumers in a focused manner. The targeting strategy is where the marketing mix comes together to create the right offer and marketing approach for each target segment. A summary of common targeting strategies is provided in the table below.\r\n
\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n
Strategy<\/strong><\/td>\r\nTarget Market<\/strong><\/td>\r\nExample<\/strong><\/td>\r\n<\/tr>\r\n
Mass marketing<\/td>\r\nEverybody everywhere<\/td>\r\nTarget<\/td>\r\n<\/tr>\r\n
Differentiated\u00a0marketing<\/td>\r\nLarge groups within the total market<\/td>\r\nCostco,\u00a0Sam\u2019s Club<\/td>\r\n<\/tr>\r\n
Niche marketing<\/td>\r\nHigh penetration within smaller, specialized segments<\/td>\r\nTrader Joe\u2019s, Whole Foods<\/td>\r\n<\/tr>\r\n
Micromarketing<\/td>\r\nIndividual customers or localized microsegments<\/td>\r\nGroupon<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<\/div>\r\n

Mass Marketing<\/h3>\r\nMass marketing, also called undifferentiated marketing<\/em>, involves\u00a0marketing to the entire market the same way. Mass marketing effectively ignores segmentation and instead generates a single offer\u00a0and marketing mix for everyone. The market is treated as a homogeneous aggregate. Mass marketing aims to reach the largest audience possible, and exposure to the product is maximized. In theory, this would directly correlate with a larger number of sales or buy-in to the product.\r\n\r\nMass marketing tries\u00a0to spread a\u00a0marketing message to anyone and everyone willing to listen. Communication tends to be less personal, as evidenced by common mass-marketing tactics:\u00a0national television, radio and print advertising campaigns; nationally focused\u00a0coupons; nationally focused\u00a0point-of-purchase displays. The success of mass-marketing depends on whether it is possible to reach enough people, through mass-communication techniques and one universal product offer, to keep them\u00a0interested in the product and\u00a0make the strategy worthwhile. While mass-marketing tactics tend to be costly because they operate on a large scale, this approach yields efficiencies and cost savings for companies because it requires the marketing team to execute only one product offer and marketing mix.\r\n\r\n[caption id=\"\" align=\"alignright\" width=\"225\"]\"Photo Crest Toothpaste. All-purpose toothpaste isn't targeted to one particular market segment.[\/caption]\r\n\r\nFor certain types of widely consumed items (e.g., gasoline, soft drinks, white bread), the undifferentiated market approach makes the most sense. For example, toothpaste (such as the brand Crest) isn't made specially for one consumer segment, and it is sold in huge quantities. The manufacturer's goal is to get more people to select and buy their particular brand over another when they come to the\u00a0point of purchase.\u00a0Walk through any supermarket, and you will observe hundreds of grocery\u00a0products, especially generic items, that are perceived as nearly identical by the consumer and are treated as such by the producer. Many mass-marketed items are considered staple or \"commodity\" items. People buy new ones when the old ones wear out or are used up, and mass-marketed brand loyalty might be the primary driver when they decide which replacement product to purchase.\r\n

Differentiated\u00a0Marketing<\/h3>\r\nA differentiated marketing strategy is one in which\u00a0the company decides to provide separate offerings to each different market segment that it targets. It is also called multisegment marketing. Each segment is targeted in a particular way, as the company provides unique benefits to different segments. The goal is to help the company increase sales and market share across each segment it targets. Proctor and Gamble, for example, segments some of its markets by gender, and it has separate product offerings and marketing plans for each: Secret-brand deodorant for\u00a0women, and\u00a0Rogaine (a treatment for hair loss) for\u00a0men.[footnote]http:\/\/smallbusiness.chron.com\/realworld-examples-effective-market-segmentation-60195.html[\/footnote]<\/span>\r\n\r\nWhen it is successful, differentiated marketing can create a very strong, entrenched market presence that is difficult for competitors to displace because of consumers' strong affinity for products and offers that meet the unique needs of their segment. A differentiated strategy can be a smart approach for new companies that enter a market and lure customers away from established players to capture share in a large overall market. Often, established companies become vulnerable to new competitors because they don't give sufficient attention to the perfect marketing mix for any given market segment.\r\n\r\nHowever, differentiated marketing is also very expensive. It carries higher costs for the company because it requires the development of unique products to fit each target segment. Likewise, each unique product and market segment requires its own marketing plans and execution: unique\u00a0messages, campaigns, and promotional tactics and investments.\u00a0Costs can add up quickly, especially if you are targeting a lot of unique market segments.\r\n
\r\n\r\n[caption id=\"attachment_1932\" align=\"alignleft\" width=\"224\"]\"Packaging<\/a> Chinese green-tea Oreos[\/caption]\r\n\r\n<\/div>\r\n
For a large company such as Kraft, the cost of this kind of\u00a0marketing is well worth it, since its\u00a0products are sold all over the world.\u00a0An example of its\u00a0differentiated marketing strategy are the many surprising variations\u00a0of the\u00a0famous Oreo cookie developed for the Chinese market. Consumers there can enjoy Oreos with cream flavors such as green-tea ice cream, raspberry-blueberry, mango-orange, and grape-peach. All of these Oreo formulations have been heavily market tested\u00a0and are based on the unique preferences of Chinese consumers. [footnote]Eric Jou, http:\/\/kotaku.com\/5947767\/the-wonderfully-weird-world-of-chinese-oreos[\/footnote]<\/span><\/div>\r\n

Niche\u00a0Marketing<\/h3>\r\nNiche marketing (also called concentrated marketing) is a strategy that\u00a0targets only one or a few very defined and specific segments of the consumer population. The goal is to achieve high penetration among the narrowly defined target segments.\u00a0For example, the manufacturer of Rolex watches has chosen to concentrate on only the luxury segment of the watch market.\r\n\r\nAn organization that adopts a niche\u00a0strategy gains an advantage by focusing all efforts on only one or a small handful of segments. All of their market analysis, product development, marketing strategy, and tactics concentrate on serving that select part of the market. When they do it well, this approach\u00a0can provide\u00a0a differential advantage over other organizations that don't\u00a0concentrate all their efforts on the \"niche\" segment(s). Niche targeting is particularly effective for small companies with limited resources, as it does not require the use of mass production, mass distribution, or\u00a0mass advertising. When a company is highly successful in desirable \"niche\" market segments, it can be very profitable.\r\n\r\n[caption id=\"attachment_1938\" align=\"alignright\" width=\"224\"]\"Photo<\/a> Ralph Lauren store, London[\/caption]\r\n\r\nThe primary disadvantage of niche marketing\u00a0is that it makes companies vulnerable to demand in the narrow market segments they serve. As long as demand is robust, the organization's financial position will be strong. But if something changes and demand drops off, the company has nothing to cushion it from financial hardship. Since the company has focused all efforts on one market (essentially putting all their eggs in one basket), the firm is always somewhat at risk. Such\u00a0companies are especially vulnerable to small shifts in population or consumer tastes, which can greatly affect their position (for better or for worse). Large\u00a0competitors with deeper pockets may choose to enter a market and use their size and resources to put smaller, niche players out of business. To insulate themselves from this type of risk, many companies pursing a niche strategy may target multiple segments.\r\n\r\nLuxury-goods providers are a great illustration of the challenges of the niche marketing strategy. When economic recessions occur, luxury-goods providers like Rolex, Chanel, and Armani\u00a0routinely\u00a0struggle financially because their narrow segment of \"luxury\" consumers has less disposable income. When fickle consumer tastes shift from Ralph Lauren to Dolce & Gabanna to Prada\u00a0(and back again), the company's profitability can hang in the balance.\r\n

Micromarketing<\/h3>\r\nMicromarketing is\u00a0a targeting strategy that focuses even more narrowly than niche marketing. It caters\u00a0to the needs of\u00a0individuals (\"individual marketing\") or very small segments in a targeted geography (\"local marketing\"). Micromarketing can be very powerful by giving consumers exactly what they want, when they want it. However, to achieve large-scale success with this approach, companies must figure out how to meet highly individualized needs efficiently and profitably.\r\n\r\n[caption id=\"attachment_1943\" align=\"alignright\" width=\"225\"]\"Photo<\/a> Handmade, customizable \"Weeglins\" from Etsy.com[\/caption]\r\n\r\nIndividual marketing<\/strong> is sometimes referred to as \"mass customization\" or \"one-to-one marketing.\" With this approach, companies offer consumers a product created to their individual specifications. For example, Build-A-Bear Workshop invites children to create their own custom stuffed animals. A child can select the type of animal, from teddy bear to unicorn, along with color, size, clothing, and other accessories. Creators of handmade goods on Etsy.com take orders from buyers who may request variations on the individually crafted jewelry, clothing, toys, and other items displayed on the Web site. In the following video, Etsty\u00a0CEO, Chad Dickerson,\u00a0explains what makes the company's\u00a0approach unique.\r\n\r\nhttps:\/\/youtu.be\/CON1iBjz-Ek\r\n\r\nClick here<\/a> to read a transcript of the video.\r\n\r\nAchieving wide-scale success with individual marketing requires product providers to develop production strategies and an entire marketing mix that can ramp up as demand grows. Frequently this involves offering a baseline product with parameters customers can customize to fit their needs. On the Web site www.mymms.com, for example, you can order M&M candies in colors of your choice, custom-printed with words or images you select. The advent of digital print technologies has also made mass customization a viable targeting strategy for companies like Vista Print\u00a0and\u00a0Sticker Mule. They provide custom print materials, stickers, decals and other printed products for businesses and individuals\u00a0using\u00a0designs created and uploaded by customers. Their primary messaging emphasizes custom products designed by and for individual customers, matching their unique\u00a0needs and preferences.\r\n\r\nLocal marketing<\/strong> is a targeting strategy focused expressly on a small, clearly defined neighborhood or geographic area. Organizations using this technique strive to generate a strong local presence, and targets may include any person or\u00a0organization\u00a0within that small area.\r\n\r\n[caption id=\"attachment_1945\" align=\"alignleft\" width=\"225\"]\"Photo<\/a> A weekly produce share from Suzie's Farm, a CSA in California[\/caption]\r\n\r\nGroupon and Amazon Local are excellent examples of local marketing. Both online services partner with local businesses to promote timely offers and special pricing for individuals living in a designated geographic area. Limited-time and limited-quantity deals\u00a0may include restaurant meals, spa treatments, performances, recreational activities, lessons, hotel accommodations, and a wide variety of other local area products and services.\u00a0These local marketing\u00a0companies earn revenue when consumers purchase and redeem the special offers in their neighborhood or city. Another example are farm cooperatives and CSAs (community-supported agriculture shares), which virtually always use\u00a0a local marketing strategy. They market\u00a0locally grown produce and farm-fresh goods to people residing in the immediate community, and their ongoing goal is to increase local supply and demand for healthy, local, farm-fresh food and produce.\r\n

Applying the Marketing Mix to Target Segments<\/h2>\r\nWith any\u00a0of the strategies described above, the marketing team must come together to develop a marketing mix tailored to the needs of each segment being targeted. This marketing mix is the unique combination of product, promotion, place, and price designed expressly to fit a designated\u00a0market segment.\"The\r\n\r\nThis course will explore each element of the\u00a0marketing mix in further detail in other modules. However, the following questions can help you start down the path toward shaping the marketing mix to fit your target segments.\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n
Marketing Mix Element<\/strong><\/td>\r\nTargeting Criteria<\/strong><\/td>\r\n<\/tr>\r\n
Product<\/td>\r\n\n\nWhat would make the ideal\u00a0product for your target segment?\r\n\r\nWhat special features or capabilities are critical for this segment?\r\n\r\nWhat unique problems does your product help this segment solve?<\/td>\r\n<\/tr>\r\n
Promotion<\/td>\r\n\n\nWhat are the best ways to get your target segment's attention?\r\n\r\nWhat do you want this segment to remember about your product?<\/td>\r\n<\/tr>\r\n
Place \/ Distribution<\/td>\r\n\n\nWhere does this segment look or shop for your product?\r\n\r\nWhat is the best way to get your product to your target customers?<\/td>\r\n<\/tr>\r\n
Price<\/td>\r\n\n\nWhat price(s) are your target customers willing to pay for your product?\r\n\r\nHow much is too expensive? How much is too cheap?<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\nAs you consider each of these questions, \u00a0you generate ideas for altering the marketing mix to appeal to your target segment.\r\n

A Case in Point: Alumni Charitable Giving<\/h3>\r\n\"Photo<\/a>\r\n\r\nLet's see how this works in practice. A university alumni organization embarks on a fund-raising campaign to generate funding for the strategic expansion of new and existing university programs. The baseline \"product\" this organization sells is charitable giving: an\u00a0affiliation with the university, a tax deductible charitable donation, and the honor of contributing to a worthy philanthropic cause.\r\n\r\nFor the coming year, the alumni organization decides to use a niche marketing strategy. Specifically, it will target alumni with significant upcoming reunions or years since graduation: 5 years, 10 years, 15 years, 20 years, 25 years, 30 years, and so forth. The organization chooses to tailor the marketing mix as follows:\r\n