4 Steps for Defining a Target Audience
Identifying your target audience is a key step in establishing a strong foothold in the marketplace. Branding expert Carolina Rogoll shares her vast knowledge on all-star branding in her online course, Brand Building 101: How to Build, Manage and Market a Brand.The following course excerpt dives into the process of defining a brand’s target audience.
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4 Steps for Targeting a Brand’s Audience
by Carolina Rogoll, from Brand Building 101: How to Build, Manage and Market a Brand
We can’t be everything to everybody. It is exhausting and almost impossible to do. The same is true for brands. Your brand won’t appeal to all consumers in the marketplace. It can also get very expensive to try to reach everybody. Thus, you shouldn’t try to cater and talk to all consumers. You should define and select the unique type of customer that you want to attract and delight. Having a unique target in mind will help focus your brand’s efforts, such as communication and product development, where they matter most.
Defining and selecting the type of customer you want to target for your brand is a critical decision in brand strategy. Your target becomes a choice of where you allocate your marketing and research and development resources. Selecting a distinct consumer target to pursue will drive focus on your innovation efforts, your marketing efforts, and ultimately will be the source of your short and long term business growth. Having a target will help you prioritize those efforts and allocate resources where they will give you the biggest return. Understanding your target will also give a clear roadmap of what you need to do to improve your brand experience to maintain their loyalty.
One of the most important tasks of a Brand Manager is to identify the right target group to pursue. This stage in the brand building process requires thorough analysis and strategy determination. The effectiveness of your marketing efforts will depend largely on how well defined and actionable the target is that you select. You also need to determine if you need a few well-defined targets versus only one to accomplish your long term goals. Once you find the right target you, as the Brand Manager, should become intimate with this group of consumers – understand their needs, what makes them thrive, their life insights and ultimately the role your product can play in their life.
In this lesson I will walk you through a series of steps to define, refine, and investigate the best target for your brand. There are 4 steps in the targeting process:
Segment your market
Select your target needs segments
Select your target sub-segments (if needed)
Meet your target
Let’s explore each step in depth.
1. Segment Your Market
Consider the recent explosion of bottled water in the American market. Currently, in the United States alone, there are more than 700 brands of bottled water. Seven Hundred. The product doesn’t get any simpler. It is water. The range of bottled water brands available is simply mind-boggling. How can a market support so many brands – brands whose product you can essentially get for free right out of the tap in your kitchen? The answer is needs based segmentation. Today consumers exhibit a range of needs from the purely physiological, at the bottom of Maslow’s pyramid, all the way up to self-actualization. The explosion of brand choices we see in the market today is the result of companies willing and eager to cater to these needs in every conceivable category.
The basic need of hydration can be solved by any of them, however each brand is trying to satisfy other needs in the pyramid: from the locally bottled brand for less than $2; to more common Dasani, Evian, Fiji that have broad global distribution; to more aspirational options like Perrier.
The first step in defining your brand target is to segment the market. Segmenting is a way of organizing your universe of customers into meaningful and distinct groups. There are many different ways to define these segments – demographics, attitudes, behaviors, values, or needs. Most importantly these segments or groups should be distinct, stable, and specific to your category.
There is a natural temptation to segment your market according to demographic data. In my experience this results in many indistinct groups that tend to change over time. Psychographic data, such as values and behaviors, similarly falls short in articulating the customer relationship to your product. Only a needs based segmentation strategy, can truly, and distinctly capture common drivers of consumer choice.
Needs are what consumers would describe as the main reason they enter the category of products or services you offer. By focusing on the needs of your target consumer, your brand can meet them with the benefits your product or service offers. You can then build a range of product or service offerings that will serve the distinctive needs in the market. Focusing on needs first, as it is the primary reason why consumers choose the product, is a more reliable way to select consumer segments.
After identifying a needs-based segment, you can dig deeper and explore the lifestyles, behaviors, and demographics of your target. Rather than starting with these variables to define your target, you are using them to help refine and better understand a specific needs based category, which in turn will help you better communicate with that audience.
To start the segmentation process, map out all of the various needs customers in your particular category might have. Maslow’s Hierarchy of Needs can be a great tool to help you create needs segments. Using each needs category in his pyramid, create a list of needs for your particular product category. Don’t just list needs fulfilled by your brand currently, list needs fulfilled by the category or sector in which your brand competes. Each section of the pyramid can help you organize main distinct drivers of choice, or reasons why consumers select your brand. Then organize the list into the most meaningful buckets of needs. The output should be distinct needs segments for your particular category that you can then choose a target(s) to delight with your product(s) or service(s).
Let’s segment the blue jeans market for example. The first questions to ask are why do people buy jeans? What are the different needs people have that a pair of jeans could fulfill? We can answer these questions using Maslow’s Hierarchy of Needs.
Some consumers will buy jeans simply because they need a basic pair of pants as a clothing option (physiological). Heavy duty or construction workers that wear jeans for work will be looking for sturdy jeans and their primary driver of choice would be durability (safety). Other consumers would buy jeans that make them look good or even hide their imperfections (self-esteem). Others will insist on finding the right type of jeans brand that can signal they are part of a unique group and want to be admired (belonging and status). These distinct needs based groups — there could be many others — will segment consumers by commonalities on lifestyle and attitudes or shopping behaviors, but the most important driver that defines them should be the reason why they need a pair of jeans.
We now have a basic structure of needs for the blue jeans category. We identified four segments worth investigating further: basic jeans, durable jeans (intended for work), jeans that improve figure, and status jeans.
2. Select Your Target Segments
With your needs segments categorized, it is time to select targets whose needs your brand can best fulfill. As a Brand Manager your task is to find the most valuable consumer segment (or segments depending on the size of your brand and your long term growth goals) upon which to focus your efforts.
Many consumers will buy your products, but the majority of the sales will typically come from a smaller, but very valuable set of customers. Many brands still experience the 80/20 rule: twenty percent of their core customers are responsible for eighty percent of their business. You need to identify who your core customers are today and who will be the core customer in the future.
A brand can play across multiple segments if it is big enough and has a broadly appealing positioning. A multi-segment target works for a brand as long as the overall brand positioning is relevant to all the segments and the range of product offering is wide enough, or can be tailored, to cover the needs of each unique group.
So, if categories can be segmented by different needs, how do you know which one is right for your brand? There are two criteria to help you make your choice: Equity Fit and Attractiveness.
The role of a brand is to solve consumer needs and establish a relationship with the consumer in a way that is relevant and resonates with him or her. The way the brand solves the consumer needs is by bringing to life the benefits and core elements that were identified in the Equity Pyramid. These benefits are only relevant to the needs segment that cares about them. Therefore, your choice of equity will also determine the appropriate needs segment to go after.
Unless you want to change your brand positioning – which you may consider if you’re changing your growth strategy – you should only target segments to which your equity is relevant. Answer these following questions for each of your segmentation groups. If the answer is yes to all of them, continue to keep them in your list.
Is your brand equity statement relevant and appealing to this segment?
Does your brand have a unique way to deliver the benefits that will solve the main need of this segment?
Do your brand benefits rank high in importance for the product category you compete in if you were to ask your target consumer?
If the brand promise is not relevant, that is probably not the right target to go after. If the benefit a potential target consumer cares most about isn’t an attribute at which your brand excels, then you shouldn’t spend your efforts here. Play in areas where you can offer superior benefits to delight your target consumer in areas they really care about.
The segment you go after should be worth your efforts and resources. There will be needs segments that are valid, but not big enough to pursue. Segments can prove unattractive either because of their actual size (it is only a small percentage of the population) or they promise limited growth potential. Here are a few questions to ask:
Is this needs segment large enough or have enough growth potential to give you the sales growth you are expecting?
Do you think the product that you will offer can be profitable based on what the consumer in this segment is willing to pay?
Answering these two questions can roughly confirm if the segment or segments are appropriate for your goals. Calculate how many consumers from your needs segment you will need to attract to meet your goal. This can be done by making some assumptions on the number of expected sales per consumer and how many you think you can effectively reach. If the segment is sizable enough to meet your sales growth expectations, move ahead and go deep to understand this segment. If your brand charges a premium price, understand how price sensitive the consumers in each segment are and roughly how many of them would really consider buying your brand.
If we own a luxury custom fitted jeans brand, the consumers in the “status” segments and the “improve figure” segment are most likely to be interested in the brand and also likely to pay a significant premium for their Jeans. If they pass the attractiveness and equity test- we can decide to focus our efforts there.
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3. Select Your Target Sub-Segments (if needed)
The third step in brand targeting is to determine whether you need a sub-segment strategy to further unlock growth in the short term. Once you have the model that segments the different needs in the category and select your core segments, you might still wonder if, by focusing your efforts even further, you could increase the reach of your brand.
If you are in this situation, dig deeper within each segment and see if there are meaningful differences or other defining characteristics that are not being met with the current market segmentation. If the answer is no, you are done. You can focus on delighting your current needs segments. If the answer is yes, you will likely benefit from identifying what type of sub-segments within a core segment could be addressed with more precise marketing strategies to further serve customer needs and unleash more sales potential. The sub-segment can then become the brand’s prime prospect for growth on a specific marketing initiative. However, you should only identify a sub-segment if you are planning to act on it.
Sub-segments can push you to focus your marketing efforts further and accelerate brand growth. For example, they can dial up the effectiveness of tactical short term marketing objectives like product or sub-variants launches, seasonal messaging, etc. You can easily choose a different sub- segment the following year if your marketing tactics or product offerings get updated. The addition of sub-segments can also open customization opportunities that can allow a business to add additional value and strengthen the relationship with potential customers. The key however, is that your sub-segments still stem from your main needs segment and core target for the brand.
Sub-segments can be built based on behaviors, attitudes, life stages, or any differentiating characteristic that creates a sizable enough cluster of consumers worth targeting. Looking at behaviors for example, you can consider consumers that are entering the category for the first time. If you are an insurance company, first time home buyers or first time car buyers could be a great sub-segment to target marketing efforts on a particular year or to accelerate brand trial.
Depending of the strength of your brand, loyal or heavy users of your product could also be a strong sub-segment for unique marketing efforts. Focusing on loyal users could be a great sub-segment strategy if you are repositioning your brand and want to reduce the risk of losing them. On their own, these groups of consumers might not be a long term need segment on their own, but they could make a great sub-segment to one of your core needs segments.
Another common sub-segment strategy is based on relevant demographics. For example, in the US several brands are following an ethnic sub-segment strategy by targeting Hispanic, Asian, or African American consumers within a particular product or service category. In some categories, ethnic consumers exhibit significantly higher spending and potential growth than other groups. Thus, an ethnic group with significant growth potential for your category, used as an additional differentiating characteristic as part of a need segment, can be a quite powerful sub-segment to focus on to accelerate growth.You can easily activate marketing strategies like promotions, specific advertising, different language activation, among the ethnic target while still staying true to the need segment to which they belong.
4. Meet Your Target
You now know how to identify and select which need segments you want to focus on, as well as a potential a short-term sub-segment if needed. The final step is to meet your target and make it come to life.
To get to know your target, first identify a few core characteristics or questions derived from the needs segment you selected. If you did a quantitative segmentation you will likely get an algorithm (core questions and answers that allow you to assign consumers to your need segment). If you defined the segment yourself, you can create drivers questions like what is the main reason you are interested in this product/service.? If you already have a hypothesis of some distinctive characteristics e.g. age, activity, lifestyle, you can use those in addition to the category drivers.
Once you have defined your target consumer based on needs segments, equity fit and attractiveness, get creative on how to find and deeply understand them. You should really try to meet them in person and talk to them. The goal is to put yourself in the shoes of your consumers.The best insights come from observing them and connecting the dots between secondary data and real life consumer verbatim. The best consumer research is one that allows you to understand who the consumer is as a full person – aspirations, habits, and surroundings – ideally visit them in their real environment versus a focus group facility. At times with consumer research, the real answers are in what you see versus what the consumer tells you. Many brand choices and purchases are sub-conscious, thus it can be hard to easily articulate why we buy what we buy. We often use default answers that we think might be accepted. However, there are clear patterns that indicate why we make brand choices. These patterns are more tangible than we think; you can spot them with good observation techniques. Our homes, how we dress, how we spend our time, the transportation method we choose all show our drivers of choice as a consumer. Given that there is more than meets the eye when talking to consumers to gain insights, marketers need to have a more journalistic and inquisitive approach when they talk to them.
Expand your brand building and managing knowledge further by enrolling in Rogoll’s Brand Building 101 course. The course takes a deep dive into everything you need to know to create a recognizable brand, including how to create brand equity, how to craft a communications strategy, and how to use marketing to drive sales. You can also check out Rogoll’s book, Star Brands. In this approachable, easy-to-use guide, Rogoll illustrates the star brand model of building, managing and marketing any brand. She teaches a step-by-step, easy-to-understand process for assessing a brand’s unique challenge, defining the brand’s equity and target, crafting a solid brand growth strategy, and measuring success once the brand is in the marketplace.