{"id":53,"date":"2015-08-28T17:50:36","date_gmt":"2015-08-28T17:50:36","guid":{"rendered":"https:\/\/courses.candelalearning.com\/waymakerintromarketing1xmaster\/?post_type=chapter&#038;p=53"},"modified":"2017-07-21T18:43:12","modified_gmt":"2017-07-21T18:43:12","slug":"outcome-segmentation-and-targeting-introduction","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/suny-marketing-spring2016\/chapter\/outcome-segmentation-and-targeting-introduction\/","title":{"raw":"Defining Your Target Market","rendered":"Defining Your Target Market"},"content":{"raw":"<div class=\"textbox learning-objectives\">\r\n<h3>Learning Objective<\/h3>\r\n<ul>\r\n \t<li>Briefly explain the concepts of segmentation and targeting<\/li>\r\n<\/ul>\r\n<\/div>\r\n<h2>Whom Are You Trying to Reach?<\/h2>\r\n<a href=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images-archive-read-only\/wp-content\/uploads\/sites\/1505\/2015\/09\/04104358\/red-255110_1280.jpg\"><img class=\"wp-image-756 alignleft\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images-archive-read-only\/wp-content\/uploads\/sites\/1505\/2015\/09\/04104358\/red-255110_1280-1024x743.jpg\" alt=\"Photo showing a hand holding a sponge, washing the hood of a red car.\" width=\"200\" height=\"145\" \/><\/a>\r\n\r\nSuppose you are selling automotive detailing products.\u00a0Is your target \"anyone with money to pay for your product?\" Or are you focusing your efforts on a tightly defined market niche of people with an identified need for what you are selling? \"Anyone with money\" is such a broad audience that it's difficult to make any impact at all with your marketing efforts or convince very many people that they need your product. \u00a0If you narrow\u00a0and carefully define your target market, though, your efforts will be more fruitful because they're focused on people with a preexisting need or interest in what you offer.\r\n<h3>Step 1: Identify the Business Need You Address<\/h3>\r\nTo define your total market, start by stating the needs you will fulfill: Who are your products\u00a0or\u00a0services intended\u00a0for? Who do you want to do business with?\u00a0What is unique about your product?\u00a0If you're selling products used in automotive detailing, your total\u00a0market consists of vehicle owners\u2014that is, all the people who could potentially buy your product. Your business will help them keep their vehicles clean and shiny.\r\n<h3>Step 2:\u00a0Segment Your Total\u00a0Market<\/h3>\r\nNext, break down this large market into smaller sections, using a process known as segmentation. You can use a variety of approaches to segment your total\u00a0market into groups with common wants or needs. In this case, we can segment by vehicle ownership and related behavior. Specific segments might include the following:\r\n<ul>\r\n \t<li>People who restore classic automobiles<\/li>\r\n \t<li>People who drive old clunkers and run them\u00a0through the car wash occasionally<\/li>\r\n \t<li>People who own \"status\"\u00a0cars<\/li>\r\n \t<li>Truck\u00a0drivers<\/li>\r\n \t<li>Motorcycle owners<\/li>\r\n<\/ul>\r\n<a href=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images-archive-read-only\/wp-content\/uploads\/sites\/1505\/2015\/09\/04104431\/14027351615_9efd88fe7a_k.jpg\"><img class=\"wp-image-968 alignright\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images-archive-read-only\/wp-content\/uploads\/sites\/1505\/2015\/09\/04104431\/14027351615_9efd88fe7a_k-1024x683.jpg\" alt=\"Photo of the steering wheel and dashboard of a classic automobile.\" width=\"225\" height=\"150\" \/><\/a>\r\n\r\nWhich of these subgroups are\u00a0likely to be your most productive market niche(s)? You recognize that\u00a0auto owners who don't care about keeping their cars\u00a0clean and shiny probably won't be very interested in your products. Then there are those who care, but they lack the time and interest to do the work themselves. They take their vehicle to a shop. Others only worry about auto detailing only when it's time for a trade-in.\r\n\r\nYou reject these segments as unsuitable for your niche market because they probably don't care enough about what you offer.\u00a0After further consideration and research, you decide that your market segment will be automobile owners who have both the time and the interest to do their own detailing work\u2014people who enjoy puttering with their vehicles, who have the time to spend, and who take pride in their vehicle's appearance.\r\n\r\nYou need to conduct research to confirm that there are enough potential customers in that group to support your business. You should also do competitive analysis to confirm that what you are offering is not readily available to them elsewhere.\u00a0With this validation, you move to step three.\r\n<h3>Step 3:\u00a0Profile Your Target Customer Segment(s)<\/h3>\r\nNext, develop profiles of your target customer(s) to get a true picture of the people\u00a0you're trying to serve. Describe these\u00a0potential customers as fully as you can. Who will actually buy your\u00a0product? What do you know about them? Where are they situated geographically? How much\u00a0do they spend on car detailing? What are they likely to spend on your products? Where do they shop? What is their annual income? What languages do they speak? What kinds of automobiles do they drive? If you are selling online, what methods do they prefer for online payment? What type of Web sites do they visit? How do they want their product delivered?\r\n\r\nIdentify your customer profile before you conduct\u00a0market planning, so that your planning is a good fit for your customers'\u00a0behavior, interests, and needs.\r\n<div class=\"atom__components__figure\" data-global-id=\"gid:\/\/boundless\/Image\/12231\">\r\n<div class=\"atom__components__figure__cont\"><img class=\"atom__components__figure__image aligncenter\" src=\"https:\/\/figures.boundless.com\/12231\/large\/4404316225-dc2febc426.jpe\" alt=\"Graphic showing the dimensions of a customer profile. These are: socialgraphic, behavioral, psychographic, geographic, demographic.\" width=\"350\" height=\"350\" \/><\/div>\r\n<\/div>\r\n<h3>Step 4:\u00a0Research and Validate Your Market Opportunity<\/h3>\r\nNow that you have fully identified your target market, conduct research to verify\u00a0that there will be enough business in this group to support your company in its growth. This process confirms that\u00a0the need actually exists and that it's\u00a0not just wishful thinking on your part.\r\n\r\nUse both primary and secondary sources in your research. You might consult business directories, obtain statistics regarding automobile owners and their car-care practices, or locate newspaper articles and magazine stories written on the subject. You can also conduct your own market research using techniques such as surveys, focus groups, interviews, and so forth.\r\n\r\nYour research should also determine the size of the market opportunity in terms of revenue as well as your potential market share.\r\n\r\nYou can use\u00a0primary and secondary sources to find out how many potential customers there are in the geographic area you have defined and how many businesses are directly or indirectly competing with you. Your market share will be the number of customers likely to buy from you rather than from your competition.\r\n\r\nHaving defined and validated your target market, you are now better positioned to develop a marketing plan that will reach your potential customers. Perhaps your sales will take off right away\u2014a great problem to have!\r\n<h2><strong>Check Your Understanding<\/strong><\/h2>\r\nAnswer the question(s) below to see how well you understand the topics covered in this outcome. This short quiz does\u00a0<strong>not<\/strong>\u00a0count toward your grade in the class, and you can retake it an unlimited number of times.\r\n\r\nUse this quiz to check your understanding and decide whether to (1) study the previous section further or (2) move on to the next section.\r\n\r\nhttps:\/\/assessments.lumenlearning.com\/assessments\/732","rendered":"<div class=\"textbox learning-objectives\">\n<h3>Learning Objective<\/h3>\n<ul>\n<li>Briefly explain the concepts of segmentation and targeting<\/li>\n<\/ul>\n<\/div>\n<h2>Whom Are You Trying to Reach?<\/h2>\n<p><a href=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images-archive-read-only\/wp-content\/uploads\/sites\/1505\/2015\/09\/04104358\/red-255110_1280.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-756 alignleft\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images-archive-read-only\/wp-content\/uploads\/sites\/1505\/2015\/09\/04104358\/red-255110_1280-1024x743.jpg\" alt=\"Photo showing a hand holding a sponge, washing the hood of a red car.\" width=\"200\" height=\"145\" \/><\/a><\/p>\n<p>Suppose you are selling automotive detailing products.\u00a0Is your target &#8220;anyone with money to pay for your product?&#8221; Or are you focusing your efforts on a tightly defined market niche of people with an identified need for what you are selling? &#8220;Anyone with money&#8221; is such a broad audience that it&#8217;s difficult to make any impact at all with your marketing efforts or convince very many people that they need your product. \u00a0If you narrow\u00a0and carefully define your target market, though, your efforts will be more fruitful because they&#8217;re focused on people with a preexisting need or interest in what you offer.<\/p>\n<h3>Step 1: Identify the Business Need You Address<\/h3>\n<p>To define your total market, start by stating the needs you will fulfill: Who are your products\u00a0or\u00a0services intended\u00a0for? Who do you want to do business with?\u00a0What is unique about your product?\u00a0If you&#8217;re selling products used in automotive detailing, your total\u00a0market consists of vehicle owners\u2014that is, all the people who could potentially buy your product. Your business will help them keep their vehicles clean and shiny.<\/p>\n<h3>Step 2:\u00a0Segment Your Total\u00a0Market<\/h3>\n<p>Next, break down this large market into smaller sections, using a process known as segmentation. You can use a variety of approaches to segment your total\u00a0market into groups with common wants or needs. In this case, we can segment by vehicle ownership and related behavior. Specific segments might include the following:<\/p>\n<ul>\n<li>People who restore classic automobiles<\/li>\n<li>People who drive old clunkers and run them\u00a0through the car wash occasionally<\/li>\n<li>People who own &#8220;status&#8221;\u00a0cars<\/li>\n<li>Truck\u00a0drivers<\/li>\n<li>Motorcycle owners<\/li>\n<\/ul>\n<p><a href=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images-archive-read-only\/wp-content\/uploads\/sites\/1505\/2015\/09\/04104431\/14027351615_9efd88fe7a_k.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-968 alignright\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images-archive-read-only\/wp-content\/uploads\/sites\/1505\/2015\/09\/04104431\/14027351615_9efd88fe7a_k-1024x683.jpg\" alt=\"Photo of the steering wheel and dashboard of a classic automobile.\" width=\"225\" height=\"150\" \/><\/a><\/p>\n<p>Which of these subgroups are\u00a0likely to be your most productive market niche(s)? You recognize that\u00a0auto owners who don&#8217;t care about keeping their cars\u00a0clean and shiny probably won&#8217;t be very interested in your products. Then there are those who care, but they lack the time and interest to do the work themselves. They take their vehicle to a shop. Others only worry about auto detailing only when it&#8217;s time for a trade-in.<\/p>\n<p>You reject these segments as unsuitable for your niche market because they probably don&#8217;t care enough about what you offer.\u00a0After further consideration and research, you decide that your market segment will be automobile owners who have both the time and the interest to do their own detailing work\u2014people who enjoy puttering with their vehicles, who have the time to spend, and who take pride in their vehicle&#8217;s appearance.<\/p>\n<p>You need to conduct research to confirm that there are enough potential customers in that group to support your business. You should also do competitive analysis to confirm that what you are offering is not readily available to them elsewhere.\u00a0With this validation, you move to step three.<\/p>\n<h3>Step 3:\u00a0Profile Your Target Customer Segment(s)<\/h3>\n<p>Next, develop profiles of your target customer(s) to get a true picture of the people\u00a0you&#8217;re trying to serve. Describe these\u00a0potential customers as fully as you can. Who will actually buy your\u00a0product? What do you know about them? Where are they situated geographically? How much\u00a0do they spend on car detailing? What are they likely to spend on your products? Where do they shop? What is their annual income? What languages do they speak? What kinds of automobiles do they drive? If you are selling online, what methods do they prefer for online payment? What type of Web sites do they visit? How do they want their product delivered?<\/p>\n<p>Identify your customer profile before you conduct\u00a0market planning, so that your planning is a good fit for your customers&#8217;\u00a0behavior, interests, and needs.<\/p>\n<div class=\"atom__components__figure\" data-global-id=\"gid:\/\/boundless\/Image\/12231\">\n<div class=\"atom__components__figure__cont\"><img loading=\"lazy\" decoding=\"async\" class=\"atom__components__figure__image aligncenter\" src=\"https:\/\/figures.boundless.com\/12231\/large\/4404316225-dc2febc426.jpe\" alt=\"Graphic showing the dimensions of a customer profile. These are: socialgraphic, behavioral, psychographic, geographic, demographic.\" width=\"350\" height=\"350\" \/><\/div>\n<\/div>\n<h3>Step 4:\u00a0Research and Validate Your Market Opportunity<\/h3>\n<p>Now that you have fully identified your target market, conduct research to verify\u00a0that there will be enough business in this group to support your company in its growth. This process confirms that\u00a0the need actually exists and that it&#8217;s\u00a0not just wishful thinking on your part.<\/p>\n<p>Use both primary and secondary sources in your research. You might consult business directories, obtain statistics regarding automobile owners and their car-care practices, or locate newspaper articles and magazine stories written on the subject. You can also conduct your own market research using techniques such as surveys, focus groups, interviews, and so forth.<\/p>\n<p>Your research should also determine the size of the market opportunity in terms of revenue as well as your potential market share.<\/p>\n<p>You can use\u00a0primary and secondary sources to find out how many potential customers there are in the geographic area you have defined and how many businesses are directly or indirectly competing with you. Your market share will be the number of customers likely to buy from you rather than from your competition.<\/p>\n<p>Having defined and validated your target market, you are now better positioned to develop a marketing plan that will reach your potential customers. Perhaps your sales will take off right away\u2014a great problem to have!<\/p>\n<h2><strong>Check Your Understanding<\/strong><\/h2>\n<p>Answer the question(s) below to see how well you understand the topics covered in this outcome. This short quiz does\u00a0<strong>not<\/strong>\u00a0count toward your grade in the class, and you can retake it an unlimited number of times.<\/p>\n<p>Use this quiz to check your understanding and decide whether to (1) study the previous section further or (2) move on to the next section.<\/p>\n<p>\t<iframe id=\"lumen_assessment_732\" class=\"resizable\" src=\"https:\/\/assessments.lumenlearning.com\/assessments\/load?assessment_id=732&#38;embed=1&#38;external_user_id=&#38;external_context_id=&#38;iframe_resize_id=lumen_assessment_732\" frameborder=\"0\" style=\"border:none;width:100%;height:100%;min-height:400px;\"><br \/>\n\t<\/iframe><\/p>\n\n\t\t\t <section class=\"citations-section\" role=\"contentinfo\">\n\t\t\t <h3>Candela Citations<\/h3>\n\t\t\t\t\t <div>\n\t\t\t\t\t\t <div id=\"citation-list-53\">\n\t\t\t\t\t\t\t <div class=\"licensing\"><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Original<\/div><ul class=\"citation-list\"><li>Revision and adaptation. <strong>Provided by<\/strong>: Lumen Learning. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by-sa\/4.0\/\">CC BY-SA: Attribution-ShareAlike<\/a><\/em><\/li><\/ul><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Shared previously<\/div><ul class=\"citation-list\"><li>Boundless Marketing. <strong>Provided by<\/strong>: Boundless. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/www.boundless.com\/marketing\/textbooks\/boundless-marketing-textbook\/marketing-strategies-and-planning-2\/steps-to-creating-a-marketing-plan-28\/defining-the-target-market-153-10627\/\">https:\/\/www.boundless.com\/marketing\/textbooks\/boundless-marketing-textbook\/marketing-strategies-and-planning-2\/steps-to-creating-a-marketing-plan-28\/defining-the-target-market-153-10627\/<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by-sa\/4.0\/\">CC BY-SA: Attribution-ShareAlike<\/a><\/em><\/li><li>Car wash. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/pixabay.com\/en\/red-hand-water-washing-cleaning-255110\/\">https:\/\/pixabay.com\/en\/red-hand-water-washing-cleaning-255110\/<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/about\/cc0\">CC0: No Rights Reserved<\/a><\/em><\/li><li>Ford Thunderbird. <strong>Authored by<\/strong>: Walter. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/www.flickr.com\/photos\/walterpro\/14027351615\/\">https:\/\/www.flickr.com\/photos\/walterpro\/14027351615\/<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><li>Customer Profile Dimensions. <strong>Authored by<\/strong>: fogfish. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/www.flickr.com\/photos\/fogfish\/4404316225\">https:\/\/www.flickr.com\/photos\/fogfish\/4404316225<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by-sa\/4.0\/\">CC BY-SA: Attribution-ShareAlike<\/a><\/em><\/li><\/ul><\/div>\n\t\t\t\t\t\t <\/div>\n\t\t\t\t\t <\/div>\n\t\t\t <\/section>","protected":false},"author":923,"menu_order":5,"template":"","meta":{"_candela_citation":"[{\"type\":\"original\",\"description\":\"Revision and adaptation\",\"author\":\"\",\"organization\":\"Lumen Learning\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by-sa\",\"license_terms\":\"\"},{\"type\":\"cc\",\"description\":\"Boundless Marketing\",\"author\":\"\",\"organization\":\"Boundless\",\"url\":\"https:\/\/www.boundless.com\/marketing\/textbooks\/boundless-marketing-textbook\/marketing-strategies-and-planning-2\/steps-to-creating-a-marketing-plan-28\/defining-the-target-market-153-10627\/\",\"project\":\"\",\"license\":\"cc-by-sa\",\"license_terms\":\"\"},{\"type\":\"cc\",\"description\":\"Car wash\",\"author\":\"\",\"organization\":\"\",\"url\":\"https:\/\/pixabay.com\/en\/red-hand-water-washing-cleaning-255110\/\",\"project\":\"\",\"license\":\"cc0\",\"license_terms\":\"\"},{\"type\":\"cc\",\"description\":\"Ford Thunderbird\",\"author\":\"Walter\",\"organization\":\"\",\"url\":\"https:\/\/www.flickr.com\/photos\/walterpro\/14027351615\/\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"},{\"type\":\"cc\",\"description\":\"Customer Profile Dimensions\",\"author\":\"fogfish\",\"organization\":\"\",\"url\":\"https:\/\/www.flickr.com\/photos\/fogfish\/4404316225\",\"project\":\"\",\"license\":\"cc-by-sa\",\"license_terms\":\"\"}]","CANDELA_OUTCOMES_GUID":"ac5561db-5b8e-4a6b-b4cd-f77f69a9c354","pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"class_list":["post-53","chapter","type-chapter","status-publish","hentry"],"part":45,"_links":{"self":[{"href":"https:\/\/courses.lumenlearning.com\/suny-marketing-spring2016\/wp-json\/pressbooks\/v2\/chapters\/53","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/courses.lumenlearning.com\/suny-marketing-spring2016\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/courses.lumenlearning.com\/suny-marketing-spring2016\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-marketing-spring2016\/wp-json\/wp\/v2\/users\/923"}],"version-history":[{"count":34,"href":"https:\/\/courses.lumenlearning.com\/suny-marketing-spring2016\/wp-json\/pressbooks\/v2\/chapters\/53\/revisions"}],"predecessor-version":[{"id":5580,"href":"https:\/\/courses.lumenlearning.com\/suny-marketing-spring2016\/wp-json\/pressbooks\/v2\/chapters\/53\/revisions\/5580"}],"part":[{"href":"https:\/\/courses.lumenlearning.com\/suny-marketing-spring2016\/wp-json\/pressbooks\/v2\/parts\/45"}],"metadata":[{"href":"https:\/\/courses.lumenlearning.com\/suny-marketing-spring2016\/wp-json\/pressbooks\/v2\/chapters\/53\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/courses.lumenlearning.com\/suny-marketing-spring2016\/wp-json\/wp\/v2\/media?parent=53"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-marketing-spring2016\/wp-json\/pressbooks\/v2\/chapter-type?post=53"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-marketing-spring2016\/wp-json\/wp\/v2\/contributor?post=53"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-marketing-spring2016\/wp-json\/wp\/v2\/license?post=53"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}