The Two Sub-Stages of Marketing Targeting:

The Two Stages of Targeting Explained

After nailing the two substages of segmentation (if you missed that, I highly recommend that you go back and read the guide I published yesterday!), the next logical step in your marketing strategy is targeting. Targeting is where your efforts go from general exploration to focused action. It’s about taking those beautifully crafted market segments and deciding which ones are worth your time, effort, and investment.

Just like segmentation, targeting is widely recognised as having two key stages, a framework supported by marketing heavyweights like Philip Kotler, Gilligan, and Wilson.

Links to previous articles:

I’ll take you through the two stages below:

The Marketing Made Clear Podcast

This article features content from the Marketing Made Clear podcast. You can listen along to this episode on Spotify:

1. Evaluating the Potential and Attractiveness of Each Segment

Now that you’ve segmented your market, the first task is to decide which segments are worth pursuing. But here’s the catch: not all segments are created equal. Some may look shiny on the surface but lack depth, while others might be gold mines waiting to be discovered.

Key factors to evaluate include:

  • Size and Growth Potential: How big is the segment? Is it growing or shrinking?
  • Profitability: Are these customers willing and able to pay for your product or service?
  • Accessibility: Can you reach them effectively with your marketing efforts?
  • Compatibility: Does this segment align with your brand values, mission, and capabilities?

Beware the “Honey Trap” Segment

There’s a common pitfall in targeting, which I like to call the “Honey Trap” Segment. This is the segment that looks irresistible, massive in size, easy to access, potentially lucrative; but ends up being a nightmare.

Why?

Often, these segments are oversaturated with competition or demand a completely different approach to marketing that doesn’t align with your brand.

For example, a luxury watch brand targeting bargain hunters because the segment is massive might dilute their premium image.

“Marketing is not about chasing every customer; it’s about choosing the right customer.” – Seth Godin

2. Selecting the Target Segments

Once you’ve evaluated your options, it’s decision time: which segments will you target?

This stage requires both logic and intuition. You’re not just crunching numbers; you’re also aligning your decision with your overall business strategy.

Strategies for Selection

There are several approaches to selecting your target segments:

  1. Concentrated Targeting: Focus all your resources on one specific segment. Ideal for niche markets or start-ups.
  2. Differentiated Targeting: Develop tailored marketing strategies for multiple segments. A great option if you have the resources to do it well.
  3. Undifferentiated Targeting: A one-size-fits-all approach. This works for commodities like salt or bottled water but isn’t ideal for most businesses.
  4. Customised Marketing: Go full personalisation, tailoring your approach to each individual customer. Think high-end services or B2B.

Interesting Tangent: The Danger of Spreading Too Thin

In an effort to “cover all bases,” many marketers fall into the trap of trying to target too many segments at once.

The result?

A watered-down strategy that fails to resonate with anyone.

Take Coca-Cola, for instance. While they serve multiple segments, they still tailor their messaging—classic Coke targets traditionalists, Diet Coke appeals to health-conscious consumers, and Coke Zero goes after the younger, calorie-conscious demographic.

Each segment gets its own identity within the overarching brand.

Real-World Examples of Targeting Done Right

  • Tesla: Early on, Tesla focused exclusively on affluent, eco-conscious individuals who wanted to make a statement. By dominating this niche, they built a loyal customer base and used it as a springboard to target a broader audience.
  • Airbnb: They segmented by traveller type (families, solo adventurers, business travellers) and targeted each group with tailored offerings, such as pet-friendly stays or luxury accommodations.

Why Targeting is Crucial

Targeting isn’t just about deciding where to spend your marketing budget. It’s about ensuring your value proposition lands with the people who need it most. By selecting the right segments, you not only improve your ROI but also build stronger brand loyalty and long-term relationships.

“The aim of marketing is to know and understand the customer so well the product or service fits them and sells itself.” – Peter Drucker

Final Thought: Segmentation and Targeting are Two Sides of the Same Coin

If segmentation is the map, targeting is the compass. Without segmentation, you don’t know where you’re going; without targeting, you don’t know how to get there. Together, they form the backbone of strategic marketing.

As I like to say on the Marketing Made Clear podcast: Mastering targeting is like mastering archery; know your target, pull back with focus, and release with precision.

Now that you’re equipped with the tools for segmentation and targeting, it’s time to move on to the next step: positioning, but that’s a story for another article!