Targeting Markets Tutorial

The first few sections of the Principles of Marketing Tutorials have introduced the basic concepts needed as a foundation for building a strong marketing program. In particular, we saw that the essential building blocks for creating a strong marketing program rests with marketing research and a deep understanding of customers. With this groundwork in place, it is now time to turn our attention to strategic decisions undertaken by the marketer to address customers’ needs and help the organization meet its objectives.

As we discussed in the What is Marketing? Tutorial, these decisions include:

  1. Selecting Target Markets
  2. Developing Products/Services
  3. Creating Promotions
  4. Arranging Distribution
  5. Setting Price
  6. Adding Support Services

In this tutorial, we examine decision #1 – how marketers determine which groups of customers to target. This is a critical point in marketing planning since all additional marketing decisions are going to be directed toward satisfying the markets selected.

For those new to marketing, selecting target markets may seem like a relatively easy decision to make. In fact, many inexperienced marketers will simply conclude that “We will just sell to whoever wants to buy.” However, this mindset is both ineffective and inefficient as the marketer is likely to drain resources in their quest to locate those willing to buy. Using a target market approach, an organization attempts to get the most from its resources by following a planned procedure for identifying customers that appear to be the best candidates to respond to the marketer’s message.

Criticisms of Marketing: Part 2

Marketing Discriminates in Customer Selection

We will see later that a key to marketing success is to engage in a deliberate process that is intended to identify customers who offer marketers the best chance for satisfying organizational objectives. This method, called target marketing, often drives most marketing decisions, including product development and price setting. But some argue that target marketing leads marketers to focus their efforts primarily on customers who have the financial means to make more expensive purchases. They contend that doing so intentionally discriminates against others, especially lower income customers who cannot afford to purchase higher priced products. This group ends ups being targeted with lower quality (and in some cases less safe) products or for some groups, no product options.

While this criticism is often valid, it is worth noting that while many “lower quality” products are inferior to current high-end products, comparison of these “lower quality” products to similar products from just a few years ago often shows there has been significant improvement. For instance, low-cost consumer electronic equipment, such as big screen LED televisions, offer more features compared to low-cost televisions of just a few years ago. Thus, while certain customer groups may not be the target market for certain new product offerings they may eventually benefit from higher-end products.

Marketing Contributes to Environmental Waste

In recent years one of the loudest complaints voiced against marketing concerns its impact on the environment. Those critical of marketing’s effect on the environment point to such issues as:

  • the use of excessive, non-biodegradable packaging (e.g., use of plastics, placing small products in large packages, etc.)
  • the continual development of resource consuming products (e.g., construction of new buildings, shopping centers, etc.)
  • the proliferation of unsightly and wasteful methods of promotions (e.g., outdoor billboards, direct mail, etc.).

Marketers have begun to respond to these concerns by introducing “green marketing” campaigns that are not only intended to appease critics but also take advantage of potential business opportunities. For example, auto makers see opportunity by creating new fuel efficient hybrid vehicles, the demand for which has accelerated in the last few years. Also, awareness of environmental issues can be seen in other marketing and business decisions, such as those that focus on reducing an organization’s carbon footprint. It is expected that, as environmental activism gains political clout and more consumer support, marketers will see even more opportunity to market environmentally-friendly products.