Consumer Marketing vs. Organizational Marketing
Choose customers whose needs your products can serve very well. You can choose to market to individual consumers (consumer marketing) or organizational consumers. Individual consumers and their families constitute the biggest customer base. However, their purchases are of small amounts and a marketer must go for volume sales. In contrast, organizational marketing targets the manufacturing companies, original equipment manufacturers, resellers, service organizations and institutions including the government. These organizations buy in large amounts and have different buying practices compared to individual customers.
Customer Analysis, Segmentation, Segment Descriptors
In every product category, different groups of customers (or segments) will each require certain benefits from the product. For example, in the toilet soap category, the biggest customer segment desire anti-bacterial protection (germicidal segment). The next biggest segment looks for moisturizing benefit in soaps (beauty segment). Other segments include mild, whitening, anti-acne, etc.
To enable you, the marketer, to design an appropriate marketing program, you must know your customers intimately, their buying patterns (why they buy our product, how they buy your product, when they use your product), their personal characteristics, where they live and buy your products and their motivations. Thus, you need to describe each target customer segment by appropriate variables. Possibilities include:
- Geographic: baranggay, city or municipality, region, country, urban or rural, climate
- Demographic: age, gender, family size, family life cycle, income, occupation, education, religion, linguistic group, race, nationality
- Psychographic: social class, lifestyle (achievers, believers, strivers), personality (compulsive, gregarious, authoritarian, ambitious)
- Behavioral - purchase occasion (regular or special occasion), benefits sought (quality, service, economy), user status (non-user, ex-user, potential user, first-time user, regular user), usage rate (light, medium, heavy), loyalty status (loyal or switcher), attitude toward product.
Organizations may have to use a different set of variables to describe them. It may include:
- Demographics - industry, company size, location
- Operating Variables - technology, user/nonuser status, customer capabilities
- Purchasing Approaches - purchasing function (centralized or decentralized), general purchase policies, purchasing Criteria.
- Situational Factors - urgency, specific application, size of order.
- Personal Characteristics -attitudes toward risk, loyalty, education
Target Marketing––Market Coverage strategies
After describing the segments in your product category, it is time to target (choose) which segment/s you are going to serve. The choice depends on your ability to serve the target well in terms of delivering products, you organization’s values and resources, and the viability of the segment. You also have to evaluate the degree of competition in the segment and the prospects of growth in the segment. A thorough environmental analysis will help you identify the marketing opportunities in your product category.
Entrepreneurs normally start “small” targeting a segment where the big players are ignoring. They are called market nichers or specialists. Such a small segment could grow big enough to attract the big players later. In bath soaps, whitening papaya soaps were marketed by small players during the late 1990s. The whitening segment has grown big enough to attract the multinationals to introduce their own entries (Safeguard, Zest of Procter & Gamble; Palmolive of Colgate-Palmolive).