[EN] Marketing - Targeting

Summary

This video explains how marketers choose targeting strategies based on market demand and available resources. It covers four main strategies: undifferentiated (for homogeneous demand), differentiated (targeting multiple segments), concentrated (focusing on one segment), and one-to-one (tailoring offerings to individual consumers). Using examples from companies like Mattel and Doudou et Compagnie, the video highlights the pros and cons of each approach. It emphasizes the importance of adjusting strategies over time and understanding market needs to remain competitive. The final step in the process is to define a unique value proposition and positioning to stand out against competitors.

Takeaways

• 😀 Homogeneous demand means all consumers have similar expectations, allowing for an undifferentiated targeting strategy.
• 😀 Heterogeneous demand requires a differentiated targeting strategy, where different segments are targeted with tailored offerings.
• 😀 The **differentiated strategy** allows a company to reach multiple segments but demands significant resources (financial, technological, human).
• 😀 A **concentrated strategy** focuses all efforts on a single segment, making the brand a specialist but also increasing the risk of failure if the segment doesn’t perform well.
• 😀 **One-to-one targeting** treats each customer as a separate segment, typically seen in custom-made or luxury products, requiring high profitability per customer.
• 😀 Mattel uses a **differentiated strategy**, targeting various toy segments with products that meet the specific needs and preferences of different consumers.
• 😀 The **concentrated strategy** is exemplified by 'Doudou et Compagnie,' which targets only one segment, focusing on becoming the expert in that niche.
• 😀 The toy market, given its fragmentation, rarely benefits from an undifferentiated strategy, as consumer expectations are diverse.
• 😀 The success of a one-to-one strategy relies on ensuring every customer is profitable, making it a more viable option for high-end or personalized products.
• 😀 Marketing strategies are not fixed and can evolve. For example, Mattel initially focused on a single product (Barbie) but later shifted to a differentiated approach to stay competitive.
• 😀 Positioning, defined by a unique value proposition, is crucial to differentiate a brand and attract its target segments, especially in competitive markets.

Q & A

What is market segmentation, and why is it important for marketers?

Market segmentation is the process of dividing a broad market into smaller, more manageable sub-groups based on shared characteristics, such as demographics, behaviors, or needs. It allows marketers to better target specific consumer groups with tailored products and messages, increasing the efficiency and effectiveness of their marketing efforts.

What are the potential downsides of targeting many market segments?

Targeting many segments can spread resources too thin, making it difficult to effectively serve each segment. This can lead to lower returns on investment and a lack of focus in the marketing strategy, especially if resources like budget, personnel, or technology are limited.

What is an undifferentiated targeting strategy, and when is it appropriate?

An undifferentiated strategy targets the entire market with a single offering, assuming all consumers have similar needs and preferences. This strategy is simple and cost-effective but is less common today due to the growing diversity of consumer expectations. It is most appropriate in markets where demand is homogeneous, though this is rare in most industries.

How does a differentiated targeting strategy work?

A differentiated strategy targets multiple market segments with distinct offerings tailored to each segment's specific needs and preferences. This approach increases market reach and helps meet diverse consumer expectations, but it requires substantial resources across financial, technological, and human capital.

Can you explain the concept of a concentrated targeting strategy and its advantages?

A concentrated strategy focuses on targeting just one market segment. By concentrating all efforts on this segment, a company can become a specialist and develop a deep understanding of its customers. The advantage is efficient use of resources, but it carries the risk of being overly dependent on a single market segment.

What is the one-to-one targeting strategy, and how is it different from other strategies?

The one-to-one targeting strategy treats each customer as a unique segment and offers customized products or services. This strategy is highly personalized and allows for deep customer relationships, but it requires that each customer be profitable for the company. It differs from other strategies by focusing on individual rather than group-based targeting.

Why is it difficult to implement an undifferentiated strategy in the toy market?

In the toy market, consumers have diverse needs, such as preferences for educational toys, age-appropriate products, or entertainment-based items. This makes it nearly impossible to appeal to everyone with a single product. An undifferentiated strategy would fail to address these varied demands, leading to limited market success.

What challenges did Mattel face that led them to adopt a differentiated strategy?

Initially, Mattel focused on the Barbie doll, but as competition grew and consumer expectations evolved, Mattel realized it needed to expand its product range to stay relevant. By adopting a differentiated strategy, Mattel could target multiple segments, offering products that appealed to different groups, from collectors to children of various ages.

What are the risks associated with the concentrated strategy, and how can companies mitigate them?

The risks of a concentrated strategy include dependency on a single market segment, which could be harmful if that segment declines or if there are issues like a product defect or a brand crisis. Companies can mitigate these risks by ensuring the segment is sustainable, profitable, and protected from sudden changes in demand.

How can a company position itself effectively after selecting a targeting strategy?

Once a company selects its targeting strategy, it must define a clear value proposition that differentiates it from competitors targeting the same segment. This process of positioning involves creating a unique image or perception in the minds of consumers, highlighting the specific benefits and features that set the brand apart.