In the 1960s, the Internet as we know it was nothing more than a fever dream, if that, and as such, the way marketers reached their audience was vastly different than how marketers appeal to them today. Before television, radio was the best way to reach a broad audience. Before radio, newspapers and adverts were the best way to reach audiences. Television came into the picture and thus continued the marketing and planning of mass media communications, where success was measured by sales and profits.
Then video killed the radio star.
“Pictures came and broke your heart
we can’t rewind we’ve gone too far.”
If we lamented this ‘death,’ it was nothing compared to what would eventually take place when the Internet forever changed the landscape. While 91% of Americans continue to listen to good, old-fashioned radio (according to a 2017 Pew Report), the Internet effectively fragmented the marketplace. Changing demographics resulted in fragmentation which lead marketers to target groups of people with different interests, desires, and behaviors, using the advent of big data and technology.
So how does a company or business properly target a consumer? How many ways can you slice the pie? Once you have honed in on a target market or various ones, how do you segment your target audience?
Segmentation can be seen as the second step of the target marketing process, with the first one being to identify markets with untapped potential and unsatisfied needs. There are almost infinite ways to segment a target audience, with some broad segmentation to divide the target market.
Let’s take beer as an example. In the U.S. there are various types of beer that each appeal to broad classes of buyers who have similar tastes, needs, and who will react similarly to marketing strategies. In terms of types of beers, there seems to be endless options: light beer, imported beer, premium beer, regular beer, craft beer, liquor, malt liquor, and more.
Continuing to use beer as an example, marketers would determine what types and flavors of beer are most popular in certain regions and cities, for example, in the Northwest, Northeast, Midwest, the South, and so on. Are there more beer drinkers in urban areas or suburban areas? What about metropolitan areas? Does city size play a role in how many beer drinkers and what types of beers the prefer in a certain area?
Some questions marketers may ask to properly segment their beer-drinking target market through demographic segmentation is looking at the data: are there are more female or male drinkers, perhaps based in a certain geographic region, and what type or flavor do they prefer? How old are they? Are there affinities for certain beers based on race (Hispanic, African American, Asian, White?) or perhaps even life stages or marital status?
What percentage of beer drinkers consume certain types of beer per income bracket? How does their level of education affect their beer drinking consumption? Is there an occupation that promotes beer consumption? What are the trends and insights that can be found here?
What personality type lends itself to become more inclined to drink beer? Are certain beer drinkers more extroverted or introverted? What kind of psychographic information can we glean from beer drinkers – perhaps based lifestyle or values?
In other words, ‘undifferentiated marketing’ is no longer our reality. Few products can satisfy the general, mass market; companies that offer products, services, events, experiences and other types of goods and services to the entire market are a thing of the past. Per “Rethinking Marketing,” an article found in the Harvard Business Review’s 10 Must Reads on Strategic Marketing, “powerful technologies for interacting directly with customers, collecting and mining information about them, and tailoring their offerings accordingly” is the norm. As such, companies must learn to “cultivate” consumers, with one of the first steps being segmenting the consumers into groups that will allow marketers to reach and appeal to them directly, thus increasing possibility of purchases, repeated purchases, and eventually, loyalty.