As Singapore continues to flourish in the rapidly shrinking globe, it is no secret that the level of competition in many industries has reached a boiling point. With the internet placing previously inaccessible products and services within easy reach, the average consumer is confronted with a multitude of brand choices for almost every category of product. While having the privilege of choice is almost certainly a good thing for consumers, this phenomenon led initially to a sea of homogeneous products and advertising campaigns that left potential customers confused and unhappy.
Those that were quick to respond realized that differentiating themselves from their peers was key to capturing the attention and ultimately purchase decisions of potential customers. However, ongoing product development and the continual development of new products are merely half of the story. With a meager 2% response rate as of 2011, according to Gartner Technology Research (http://www.thebusinesstechnologyforum.com/2011/04/is-mass-marketing-becoming-obsolete/), traditional mass marketing is quickly being replaced with deliberate, targeted strategy that seeks to maximize advertising returns from a specific audience.
With this in mind, this article aims to share 2 simple steps that should be taken by any advertiser that seeks maximize advertising ROI, by engaging in a differentiated, audience specific marketing campaign.
Step 1: Segmentation
The first step in launching any successful marketing campaign is to gain a keen understanding of potential customers in the business environment. Without this knowledge, any attempt at a targeted campaign would probably be a hit or miss fiasco that would likely see a poor return on investment. After all, trying to reel-in specific customer archetypes without even being sure of their existence in a particular market would be akin to dangling a carrot in front of a non-existent rabbit hole.
As surely as the internet allows consumers to find out about specific products with ease, it also acts as an invaluable resource for advertisers, allowing them a glimpse into the minds of their would-be consumers. In contrast to the traditionally time-consuming and costly process of conducting manual surveys, social networking tools along with corporate websites allow for the assimilation of consumer data in a relatively cheap and pain-free way.
Following this, the process of segmenting the consumer population may begin. In most if not all industries, the four following, commonly used, yardsticks may be employed to analyze and ultimately divide the population of consumers into segments which may later be targeted in ad campaigns.
age, gender, sex, social class, income, education, IT literacy
country, city, region
lifestyle, attitude, interests, personality
loyalty, product preference, price perception
In this entire process, advertisers will not only gain valuable insights into the characteristics of the consumer segments present in the business environment, but also a feel of the size of each segment, allowing them to better judge the most viable segment(s) for marketing their respective products.
Step 2: Targeting
In essence, targeting refers to an analysis of the various consumer segments present in the business environment and deciding which are the most likely to purchase products or services. This process theoretically involves a breakdown on the various characteristics of the particular product or service in question, and determining which segments of consumers they are most likely to appeal to.
The benefits of targeting specific market segments are manifold:
Firstly, businesses will be able to tailor aspects of their products or services to suit the specific needs of their target market, resulting in end products that carry high levels of differentiation and are more suited to their customers' needs and preferences. In the long run, this is likely to produce higher levels of customer satisfaction, build customer loyalty and encourage customer retention.
Second, advertising efforts, whether in magazines or otherwise, can be fine tuned to meet the demands of the target market segment. As mentioned earlier, the vast number of choices on the market, in addition to the homogeneity of products means that when executed prudently, well targeted, differentiated products and ad campaigns are likely to benefit from a significantly higher ROI, as compared to a mass marketing campaign.
Third, audience specific ad campaigns are likely to be far less costly than mass marketing campaigns, for the simple reason that a targeted, audience specific campaign allows the advertiser to reach out to consumers only within the target segment (in contrast to mass marketing which seeks to reach as many consumers as possible). In this respect, magazines, for example, make for an ideal advertising platform, owing to the high level of audience specificity for each individual title, in addition to their significantly lower cost compared to mass market advertising.
As mentioned in the opening paragraphs, ceaselessly rising levels of competition in an increasingly global economy means that brand differentiation is a deciding factor in allowing businesses to pull ahead from the rest of the pack. Engaging in a differentiated, audience specific marketing campaign does not by any means guarantee instant success in this fiercely competitive global arena. It does however, lend a helping hand in reaching out to the right consumers, building brand recognition and loyalty. Coupled with a high quality, well positioned, product or service that caters to the needs of its target audience, there is no reason why it should not be a key success factor in the long run, for a majority of businesses across many industries.
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