Understanding Your Target Market
Understanding the target market is a crucial aspect of the communication process. When companies launch a new product or change a current product, they try to promote this particular product to increase/maximize profits. Marketers can do that through a marketing communication process. Through mass media, such as television, newspapers or internet advertisement, a target market can be reached by the communication. The Marketing manager acts as the sender and with his/her form of the communication (it could be for example the advertisement on television), the “message” is encoded. The people who view the commercial on television (which is the message channel), decode the message by using their own interpretation. Interpretations can vary from individual to individual, because everyone’s personal experiences and current circumstances influence the way one interprets the message. Thus, messages can even be interpreted differently by the same person at different times.
The only way that marketers (and essentially also companies) can know how their message has been received is by the feedback of the viewers. Because selling is only emphasized on the target market, it is most crucial for companies and marketers to understand the target market’s feedback in this communication process.
This however is not an easy task. The target market starts a new communication process when leaving feedback by encoding their message, sending it through a message channel until the company or marketers receive the message and decode it, which has the risk of being misinterpreted as well. Hence, the communication process is quite difficult to understand correctly.
Because the target market determines the sales performance of a company, it is very important to understand the target market correctly. Feedback such as the words “I agree”, positive comments on internet web sites, many recommendations and a high sales rate of a product mean usually that the target market is providing positive feedback.
If the target market sends negative feedback, in the form of negative comments about the product or no sales activity for a given product, the marketers have to not only interpret the feedback as being negative, but also analyze and understand why the target market does not like the product.
In addition, marketers need to understand the target market in regards to consumer surveys. The answers/results need to be closely analyzed so that marketers can understand and predict purchasing behavior and develop products and services that will meet customer’s wants and needs and thus be high in demand, which in turn would lead to high profits.
Targeting Different Social Classes
It is important for companies to adjust their marketing strategy and develop different offerings for consumers in different social classes
Each social class usually has differing needs, wants, and consumption patterns. The upper class and upper middle class usually tend to invest more than people of other social classes. Other consumer behavior patterns among the upper class and upper middle social class that have been identified are that only half of the social class purchases gifts from upscale stores, while the remaining half buys gifts at regular stores. Furthermore, for this class the product characteristics determine the quality one assigns to a product rather than the price.
A distinct consumer behavior habit between the middle class and the lower class is for example that higher percentage of people in the middle-class subscribe to premium cable channels. One reason for this behavior is the financial factor, namely that more people in the middle class can afford the monthly payments for premium cable channels. Finally, homeless people who do not have shelter and often times much food, have significantly different values than people in the upper class for example. Homeless people will spend money primarily on food and shelter, which are their primary and basic needs. In contrast, since upper class consumers have shelter and food, they rather take it for granted and value luxurious items more.
There are many other distinct consumer buying habits that each social class has. And only with the knowledge of these differences, can a company develop an offering that will suit a targeted social class in their wants, needs, and expectations. Offerings that would be valued and affordable by the upper class, such as a Rolls-Royce car are not affordable for someone in the working class. Thus, other car models that will be affordable to the working class as well as meet their needs of commuting every day to and from work have to be developed.
To meet consumers’ values, needs, and expectations of all social classes, a company should develop different offerings for consumers in each social class.
Not only should a marketing strategy and/or an advertising campaign be adjusted to the social class one is targeting, but it can also be based on another factor.
Value segmentation is the process of identifying groups of consumers who have a similar or same set of values that differ from those of other groups.
One example is the market for cosmetics. Women who value luxury and price as well as brand name to be considered someone who values high quality and has the finances to purchase the product might buy a Lancome Definicils for $25, while someone who simply wants to lengthen and darken their lashes and doesn’t value the brand name or quality of the mascara might rather purchase the Maybelline Full’n Soft Mascara from Walmart for $7.
Another example would be the purchase of a cell phone. While some people, especially teenagers, will value for a cell phone to be “new”, and “trendy” as well as expensive and having the latest technology and thus purchase an iPhone for $450, another group of people might simply value the ability to communicate with a cell phone regardless of their location in the United States and buy an LG Rumor for $80.
Another product market where value segmentation can be easily observed is the car-market. The group of people valuing their status as perceived by others might purchase an expensive Lexus or an Audi, while another group of people valuing the basic ability of transportation from one place to another will buy an inexpensive Toyota that will meet their needs.