target market

SMALL BUSINESS SUCCESS

TARGET MARKET

Richard Randolph

Executive Director

Florida Customer Experience Institute

There is only one valid definition of business purpose: to create a Customer.

The Customer is the foundation of a business and keeps it in existence.

The Customer alone gives employment.

And it is to supply the Customer that society entrusts wealth-producing resources to the business enterprise. ~ Peter Drucker

A MARKET – A group of

① Customers or potential Customers

who have

② Purchasing power

money (or ability to get it) and

authority to buy

and

③ Unsatisfied needs and/or wants

WHAT IS A “MARKET”?

13-3

A MARKET – A group of

① Customers or potential Customers

who have

② Purchasing power

money (or ability to get it) and

authority to buy

and

③ Unsatisfied needs and/or wants

WHAT IS A “MARKET”?

13-4

If your target doesn’t

have ALL of these,

it’s not a Market!

You just won the lottery!

Let’s start a radio station!

Rule 1: It’s not about you.

Rule 2: Never forget Rule 1.

Your opinion, although interesting, is irrelevant.

Remember: Find a need – then fill it.

Tune In To W I I F M

What’sInItForMe?

People are infinitely self-interested!

TARGET MARKETING: SEGMENTING

13-8

Segmentation:

Divide the total market into groups with similar characteristics

“Divide and conquer”

Targeting:

Select which groups (segments) the firm wishes to serve

Focus!

TARGET MARKETING: TARGETING

Focus Strategy:

A competitive strategy in which cost and differentiation-based advantages are achieved within narrow market segments.

TARGET MARKETING: FOCUS

Let’s bake a cake! But which one?

Now, what ingredients will we need?

PRODUCT PRICE

PLACE PROMOTION

TARGET MARKET

Product

Price

Place (Distribution)

Promotion

THE MARKETING MIXIt’s like your cake mix – different ingredients for each different type of cake.

These “ingredients” are mixed and added, depending on the type of product you offer,

and Customer you want to reach.

The MARKETING PROCESS

Segment

Target

PRODUCT PRICE

PLACEPROMOTIO

N

TARGET MARKETMarketing Mix

Focus!

Divide and Conquer

Application: TOYOTA

CAMRY: • Primary Target: Men (53%) Age 35-54

– Likely to have post-secondary education – Employed full-time; Likely owns a home– Have a HH income of $50,000+ – Married, with children between 12-18 yrs of

age

• Secondary Target: Women, ages 35-54, similar demographic traits as primary

Application: TOYOTA

LEXUS: • The “prestige luxury” market segment • wealthier, image-conscious consumers • car buyers with at least $5 million in

assets• mostly men

Application: TOYOTA

SCION: • the 17% of Generation Y whom

Marketers consider to be Trendsetters. • In its first full year on the market, Scion

had the lowest average buyer’s age (35) in the automotive industry, and sold around 100,000 customized cars.

~ Peter Drucker

The aim of Marketing is to know and understand the Customer so well that the product or service fits him and sells itself.

~ Michael Dell

“It has always made sense to me to build a business based on what people really wanted rather than guessing what we thought they might want.”

Market Segmentation Variables Segmentation Variables

The parameters used to distinguish one form of market behavior from another for the purpose of market segmentation

Demographic VariablesSpecific characteristics that describe customers and their purchasing power

Benefit VariablesSpecific characteristics that distinguish market segments according to the benefit sought

Segmentation VariablesDivide the market by:

Geographic Segmentation – cities, counties, states, regions

Demographic Segmentation – age, income, education, gender, – any measurable characteristic

Psychographic Segmentation – group values, interests, and opinions

Benefit Segmentation – product benefits the Customer prefers. (Examples: travel; senior care)

Volume (Usage) Segmentation – volume of product use. (R-F-M)

Recency Frequency Monetary value

How will you stand out

in a crowd?

Who are you?

Your perceived identity determines your success

You must convey a deep, defining meaning in the mind of your Customer/Client

Create a “mental pigeon hole” that defines your position in the market place

You must stand out in a crowd – you must be perceived as “special” – unique – “just right for me”

There’s no room for “the ordinary”

Therefore, you must be tightly focused

7–22

The Urgency of Focus

Tom Peters

Perception

is all there is.

Almost every kid growing up has learned the lesson of starting a fire with

a magnifying glass. You find some dried leaves or grass, or an old piece of

newsprint. Go outside on a hot summer day,

and focus your magnifying glass into the

tiniest point you can make, then hold it steady

over the target. Before long, you’ll see the target

start to brown, then smoke. It won’t take long

before you have lit a fire.

But you’ll never start a fire… if you:

• don’t focus the lens to its sharpest point, and

• don’t hold the glass steady (if you constantly

move it around, you’ll never generate any heat!)The lesson: Focus on your target

as narrowly as you can,

then hold it steady and keep after it.

How to Start a Fire With a Magnifying Glass

7–25

“In trying to become all things to all people, you end up becoming nothing to anybody, and basically render yourself invisible in the marketplace.”

~ Geoff Ayling

“You must become a meaningful specific

– not a wandering generality.”~ Zig Ziglar

A Common Characteristic of Intelligent People

• The Butterfly Effect – Too many options!

• The solution: Pick one thing,stick to it – become a specialist

In 1921, Dr. Louis B. Terman, a Stanford University

psychologist, set about the study of genius by tracking

1,470 genius-level children throughout their lifetime. The

study was known as “the granddaddy of all life-span

research.”The data showed that exceptional intelligence does not guarantee

extraordinary accomplishment. According to the study, what distinguished

those of spectacular achievement from those of low achievement and failure

was, “prudence and forethought,

willpower, perseverance, and desire.” They chose among their many

talents and concentrated their efforts.

For Life, you must choose one chair.

An Example of Focus

Luciano Pavarotti, the superstar tenor,

tells of the time in his life when he had

to make a critical decision.

“When I was a boy, my father introduced me to the

wonders of song. He urged me to work very hard

to develop my voice. Arrito Pola, a professional

tenor in my hometown of Modena, Italy, took me as

a pupil.

About the same time, I also enrolled in a

teacher’s college.

On graduating, I asked my father, ‘Which shall I

be? Shall I be a teacher or a singer?’

‘Luciano,’ my father replied, ‘if you try

to sit on two chairs, you will fall between

them.’

Be Smart!Not “being everything” is smart.

Not working on everything, but rather emphasizing selected strengths is

the route to excellence.

For some, this requires a redirection from “doing all and being all” to “being

more” by focusing on less and doing a lot of what you do well.

You can follow this advice by developing selected strengths and

managing or dropping those activities and fantasies you pursue to no

constructive end.

A lot of knowledge about one subject offers the integrating point for all other

knowledge.

One thing!

I've also learned that only through

focus can you do

world-class things,

no matter how

capable you are. ~ Bill Gates

Tie two birds together and though they have four

wings, they cannot fl y.

That’s been one of my mantras — focus and

simplicity. Simple can be harder than complex:

You have to work hard to get your thinking clean

to make it simple. But it’s worth it in the end

because once you get there, you can move

mountains.

~ Steve Jobs

Real leaders don’t need clutter.

People must have the self-confidence

to be clear, precise, to be sure that

every person in their organization –

highest to lowest – understands what

the business is trying to achieve.

But it’s not easy. You can’t believe how

hard it is for people to be simple, how

much they fear being simple.

They worry that if they’re simple, people

will think they’re simple-minded.

The reality, of course, is just the reverse.

Clear, tough-minded people are the most simple.

~ Jack Welch former CEO of

General Electric

What about controversy?

Is it OK for some people to not like you?

Polarize people!◦ Some will love you – and others may hate you!◦ The opposite of “love” is NOT “hate” – it’s

APATHY! or INDIFERENCE! Your goal is to create passion – for or

against! Don’t be concerned about critics!

The only result that should scare you is lack of interest!

YES!

Your effort is the Hammer.

Your Marketing is the Nail.

The sharper the nail, the easier it is to drive it in.

Marketing is the Nail That Builds Your Business

The essence of Marketing is narrowing the focus.

You become stronger when you narrow the scope of your operations.

You can’t stand for something if you chase after everything.

~ Al Ries and Jack TroutPositioning –

The Battle for Your Mind

Rule # 5:

The Law of FOCUS

We succeed only as we identify in life, or in war, or in anything else, a single overriding objective, and make all other considerations bend to that one objective.

~ Dwight D. Eisenhower

Customers Are From Venus; Companies are from Mars

Your Custome

rs

Your Company

High company knowledge High interest in topic Egos Internal Politics Varied understanding of

Customers

High self-interest Immediate Needs Wants Desires Interests Barriers and blocks

“Consumers are statistics.

Customers are people.”

~ Stanley Marcus

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