What is a target segment

What actually is a target segment: How it is created, not identified

The Myth of the Target Segment: Understanding Consumer Variables in Modern Marketing

In the traditional view of marketing, businesses often think of their target segment as a homogenous group of customers who share common characteristics. However, the reality is more complex. The concept of a target segment is not a static group but a dynamic set of variables that define consumer behaviour. These variables include age, gender, income, education, lifestyle, and more. Understanding and recalibrating these variables is crucial for businesses to effectively reach and influence their potential customers.

The Reality of Consumer Variables

1. Demographic Variables

- Age: Different age groups have varying preferences and purchasing behaviours.

- Gender: While some products are gender-specific, many transcend gender boundaries.

- Income: Disposable income determines purchasing power and spending habits.

- Education: Higher education levels often correlate with more informed purchasing decisions.

- Occupation: Professional life impacts needs and consumer behaviour.

2. Psychographic Variables

- Lifestyle: Interests, hobbies, and daily activities influence purchasing decisions.

- Values and Beliefs: Cultural and personal values shape consumer preferences.

- Personality: Traits like openness to new experiences or risk aversion affect buying behaviour.

3. Behavioural Variables

- Usage Rate: Frequency of product use can segment consumers into light, medium, and heavy users.

- Brand Loyalty: Degree of attachment to a brand affects purchasing patterns.

- Benefits Sought: Different consumers look for different benefits in a product, such as quality, convenience, or price.

The Challenge of Viable Business Segments

Often, when businesses attempt to segment their market, they find that no single group is large enough to be economically viable. This can occur because the intersection of multiple variables results in a highly specific and small target audience. For instance, targeting "young urban professionals with high disposable income who are environmentally conscious" might be too niche to support a large-scale business.

Recalibrating Variables

To overcome this challenge, businesses must recalibrate their understanding of these variables:

1. Broaden or Narrow Focus:

- Broaden: Expand the criteria to include a larger audience. For example, instead of targeting only high-income consumers, consider middle-income consumers with aspirations for premium products.

- Narrow: Identify sub-segments within a broader audience that might have similar purchasing behaviours.

2. Use Data Analytics:

- Employ advanced analytics to identify patterns and correlations between different variables. This helps in finding new segments that may not be immediately obvious.

3. Consumer Behaviour Modification:

- Conduct workshops, campaigns, and educational programs to influence consumer behaviour. This can shift preferences and expand potential markets.

Changing Consumer Behaviour Through Marketing

1. Workshops and Campaigns:

- Example: A health food brand could run workshops on healthy eating in schools and corporate offices. This not only educates potential consumers but also creates a demand for their products.

2. Advertising and Re-education:

- Advertisements are powerful tools to not only highlight a product's features but also to shape consumer perceptions and behaviours.

- Example: Tata Tea’s “Jaago Re” campaign in India effectively combined product promotion with social awakening, encouraging consumers to be more socially conscious.

Case Studies

1. Patanjali Ayurveda:

- Background: Patanjali initially targeted health-conscious consumers looking for natural products.

- Strategy: They broadened their segment by educating a larger audience on the benefits of Ayurveda through workshops and extensive advertising campaigns.

- Outcome: Patanjali successfully created a massive market that transcended traditional demographics.

2. Amul:

- Background: Amul's target segment includes consumers of all ages and income levels.

- Strategy: Through consistent and relatable advertising, such as the famous Amul Girl campaigns, they educate consumers about the importance of dairy products and the brand's values.

- Outcome: Amul has maintained a strong market presence by appealing to a broad audience while reinforcing their brand message.

3. Nike:

- Background: Nike targets athletes and fitness enthusiasts.

- Strategy: Nike uses powerful advertising campaigns that inspire and motivate, such as "Just Do It," which transcends specific demographic variables and appeals to a universal desire for achievement.

- Outcome: Nike has built a global brand that resonates across different demographics by focusing on shared values and aspirations.

The notion of a fixed target segment is outdated in the dynamic landscape of modern marketing. Instead, businesses must recognise and adapt to a complex interplay of demographic, psychographic, and behavioural variables. By recalibrating these variables and employing strategies to influence consumer behaviour, companies can expand their market reach and create more effective marketing campaigns. Through workshops, campaigns, and advertisements, businesses can educate and re-educate their audience, ensuring sustained engagement and loyalty. Understanding and leveraging these principles is essential for success in the Indian market and beyond.