The Marketing Process: One Size Is Never A Good Fit For All
Buyers are too numerous, widely scattered and varied in their needs and buying practices. Therefore, companies cannot appeal to all buyers in the marketplace or at least not to all buyers in the same way. Remember, potential clients are those who are willing and able to buy your product. Businesses ought to send the right messages to the right groups of prospective buyers & respond more effectively to their wants in order to increase their sales. This can be done in 3 simple ways as discussed below.
This is the first step in the marketing process. It is entails carrying out a detailed research on your potential customers and categorizing them into subsets. Every subset constitutes of customers who you perceive have common preferences, interests or priorities, thereafter designing and implementing strategies to target them. The end goal of segmentation is to divide the market in a way that it is easily accessible to you and for you to improve how best you serve the needs of each segment.
A business that targets segmented customers promotes its products and services more effectively. There is no single way of effecting segmentation in a market. An entrepreneur must try different segmentation variables, alone or in combination to find the best way to understand the market structure. Some of the major variables that can be used to segment a consumer market are:
Geographic variables create different target customer sub-groups based on geographical boundaries. Potential customers have preferences and needs that differ according to their neighbourhoods, cities, counties or even countries. For example, Uber has segmented its potential customers according to cities and counties and has managed to offer customized services as per the region. In the coastal part of Kenya, Uber incorporates tuktuks which are a common means of transport in this region. You will however not find such vehicles listed in the Nairobi Uber services. By segmenting their market according to regions, Uber has been able to tweak their offering to what is most suitable to the customers in each particular segment.
Demographic variables subdivide the market based on variables such as age, gender, occupation, income, family size, and more. For the longest time Nivea has offered different deodorants, lip balms and skin care products for men and women. Colgate sells assorted oral products that cut across all ages. EABL has beer brands for different age groups, income brackets and even gender.
Psychographic variables divide customers into different groups based on social class, lifestyle and personality characteristics. It goes beyond the demographic composition of your target group and focuses on their personal traits and preferences.
Behavioural variables divide markets by behaviours and decision-making patterns such as knowledge, attitudes, usage, consumption or responses to a product. For example, younger buyers may tend to use shower gels while older consumers would tend towards soap bars. Segmenting markets as such enables a business leverage on a more targeted approach.
Angling one’s marketing efforts towards a specific group of customers is the core of targeting. In marketing there is no such a thing as one size fits all. Each segment the business identifies should be approached differently; in a way that creates maximum value for them. In identifying who your target customer is, you should be able to answer the following questions:
· Who is your ideal customer?
· What is their lifetime value?
· What are their needs and wants?
· Do your offerings meet these needs?
· Who are your existing customers?
· Are they loyal?
· Are they happy?
· How do they see you?
Thereafter you need to focus; to capitalize on what the business is good at. It is important to be the best option for one particular target. Once you have identified a target group, focus on it and find ways to grow. Fully understand how to serve the needs in this segment before shifting to another segment. Segmentation and targeting help the business conceptualize on who they want to focus on; being the best service provider for them. The power of focus is that; you get to be known for a specific trade.
Entrepreneurs tend to serve every customer’s needs, out of fear of losing out on money. Focus however helps you gain more once you are really good at your core business. Everyone prefers or is referred to you for a specific service. Focus helps you capitalize on what you are good at for one particular segment. Don’t be involved in everything; why be a jack of all trades yet a master of none?
How many segments should you target on at any given time?
This depends on how different or similar the segments are. How much more would it cost you to venture into another segment? Do you have this capacity to serve this segment? Is the value chain the same? If the segments are served by the same elements, then this is feasible and might be a good move. Your focus should also be on the most profitable segments; choose target segments based on potential for growth, profitability and available capacity.
Stick to one area and be known for it. Once it’s up and running, you can extend your operations into other segments in order to build up revenues.
An entrepreneur must decide on his value proposition after once he has decided on what segment to target. He needs to determine how the business will create differentiated value for targeted segments and the position it wants to occupy in those segments.
A product’s position is the way a product is defined by consumers on important attributes — it is the place the product occupies in a consumer’s mind relative to competing products. It is important to note that consumers position products with or without the help of marketers. This will happen whether or not the business is proactive or passive about it.
The company should therefore strive to establish their brand in the way that they want consumers to perceive them. This can be done through having a positioning concept. Well-prepared positioning concepts attempt to sell the benefits of the product or service to a potential buyer. If you run a restaurant, every customer that comes in to eat will compare this restaurant to all the other restaurants they have been to before. It is therefore important to give your customer an experience that will surpass all the other experiences from previous restaurants.
The positioning concepts usually focus on the rational or emotional benefits that a buyer will perceives by using the product/service. For example, in the automobile industry different brands have positioned themselves differently in the eyes of their customers. Toyota Yaris and Honda Fit are positioned as economy vehicles. Mercedes and Porsche are positioned as luxury and status vehicles. A restaurant may position itself as either one that sells cultural cuisines, vegan, seafood or fast foods.
SMEs must plan positions that will give their products the greatest advantage in the selected target markets.
The differentiation and positioning task consist of two steps:
1. Identify what sets your product apart — what is your competitive advantage?
2. Selecting an overall positioning strategy.
The marketing process may seem tedious but for a business to curve out some market share, it must develop its marketing strategy. The marketing process ensures all employees in the organization are focused and drive their efforts to one direction. At the end of the day, everything you do must drive sales.
 The lifetime value of a customer is simply how much value (revenue) the business will earn from a customer if they are a repeat customer.