by Targeting strategy is a strategy for selection of potential customers the company/ organization can sell its products/services to. Targeting is done to a specific target group as there are various segments in any market. Most firms do not select all the segments in a market to operate and choose one or few of the identified segments through targeting. As mentioned earlier, targeting is this process of selection made on the basis of attractiveness of the segment.
STP marketing strategy is an important way of doing business, where its stands for market segmentation, targeting and positioning. Targeting is the processes of identifying the important target market and target audience which a company wants to sell its products to. Any product or service would not be of utility of every person. And hence companies must be focused on whom they want to target. A good targeting strategy helps a company have focused sales growth, enhanced promotional strategy, build strong customer loyalty etc. Hence, targeting strategy is the backbone for any marketing firm.
Target Attractiveness
Sales Criterion: Using this method, the business allocates its resources to target markets based on historical sales patterns. This method is especially useful when used in conjunction with sales conversion rates. This method is used in retail. A disadvantage of the method is that it assumes past sales will remain constant and fails to account for incremental market potential.
Distance Criterion: Under this approach, the business attempts to define the primary geographic catchment area for the business by identifying people who live within a predetermined distance of the business. For a retailer or service-provider the distance might be around 5 km; for domestic tourist destination, the distance might be 300km. This method is used extensively in retailing.
Interest Survey Methods: This method is used to identify new business potential. Primary research, typically in the form of surveys, identifies people who have not purchased a product or service, but have positive attitudes and exhibit some interest in making a purchase in the short-term. Although this method overcomes some of the disadvantages of other methods, it is expensive even when syndicated research is used.
Chain ratio and indexing methods: This method is used in marketing of branded goods and retail. It involves ranking alternative market segments based on current indices. Widely used indices are the Category Index and Brand Index. The Category Index measures overall patterns within the product category while the Brand Index calculates a given brand’s performance within the category. By dividing the Category Index by the Brand Index, a measure of market potential can be obtained.
Target Compatibility
Consumer compatibility is the overall metric that measures the value consumers place on your brand. It shows how effective your consumer-brand relationship is. This is not a new concept; for years loyalty programs have helped measure consumer compatibility.
Brand Loyalty
As you most likely know, brand loyalty is essential to measure. While you probably already measure the loyalty of consumers to your brand through loyalty programs, you might not know that you can use brand loyalty for competitive intelligence as well.
Through location data, you can measure how loyal consumers are to your competitive set versus your own brand. Then, you can identify the least loyal competitor consumers or the most likely to switch loyalties and target them for competitive conquesting.
Brand Affinity
Finally, it’s important to consider the complete offline consumer journey in your consumer compatibility analysis. In addition to understanding how consumers are interacting with your own brand, it can be helpful to know where else your consumers shop and what their offline interests are.
If you see that your consumers are avid Dunkin’ fans and often visit the Dunkin’ near your brand location, you could develop an ad campaign with messaging that plays on that shared interest. Brand affinity can reveal opportunities for co-marketing like this that you might not have considered before.
Visit Frequency and Time of Visit
In addition to dwell time, you need to evaluate how frequently consumers are visiting your stores. Are they one-time shoppers or are they returning to your stores time and time again?
You can gain insights like these through location data, which reveals not only how often consumers visit your stores but also which times are most popular for visits. This information can inform marketing activations and promotions for your brand, especially when you pair it with demographic attributes of your consumers.
