Defining the “Who”

~ Smita Arora, Sanjana Ramani, Deepa Soman

A particular group of people that is identified as the intended recipient of an advertisement, product, or campaign is called target group or audience.

A target group is a particular group of people that a product or service is intended to reach.  It becomes a crucial part of market research as the decisions are based on the findings of the study. Meeting the right target audience and eliciting reactions from them to help the business take decisions is always at the core of market research.

Target Group Demographics

It is a set of people which are predetermined based on the demographics and psychographics. The selection of the target group in research is dependent on multiple variables such as age, sex, education, income, socio-economic class, residence or residence size, marital status, occupation or field, relation to the product, use of products/ brands and services, use of media and internet, equipment, activity on social networks, customer characteristics, psychological profile and many others. Selection basis only demographics or only psychographics compromises the consumer understanding and thereby the outcomes.

One among the many criteria for segregating a target group is based on Socio-Economic Class (SEC) which is an older system of classification.

The socio- economic scale ranges from the affluent and highly educated at the top to the uneducated and unskilled at the bottom. Social class is defined according to the following categories:

Social Grade Social Status Occupation
A  upper middle class higher managerial, administrative or professional
B  middle class intermediate managerial, administrative or professional
C1  lower middle class supervisory or clerical, junior managerial, administrative or professional
C2  skilled working class skilled manual workers
D  working class semi and unskilled manual workers
E those at lowest level of subsistence state pensioners or widows (no other earner), casual or lowest grade workers

 

Broadcast Audience Research Council (BARC) India has adopted new SEC called New Consumer Classification System (NCCS). The NCCS is co-developed by MRSI (Market Research Society of India) and MRUC (Media Research Users Council) as the new classification system for industry use. This new system is based on two variables:

  • Education of Chief Wage Earner
  • Number of Consumer Durables owned by the family. The list has 11 items, ranging from electricity connection to cars and air conditioners; including agricultural land in rural areas

This new SEC is developed after extensive analysis of various discriminators that would best define the purchasing power of a household and is much better than the current system because it reduces heterogeneity within social grade and stretches the differences by grade. Below is the new SEC grid as per NCCS:

Recording the SEC

Comparison between new and old SEC:

NCCS brings its advantages to market research as:

  • It does not limit the recruitment to education and occupation
  • It is simple, easy to understand and capture data thereby saving time.
  • A single system for both urban and rural India.
  • Marketers get an idea what customers in different SEC are like (demographics and psychographics) already have and what they are willing to buy.
  • It helps them predict the purchasing power of the consumers and thus helping the marketers plan their media expenses.

SEC plays a great role in market research. It brings clarity of the type of people to be recruited. It studies the needs to be done with a specific set of people with certain background which will help the field to quickly decide whether the person is suitable to be interviewed or not.

Starbucks Target Group

Defining the ‘who’ for the product and service sharply is key to brand success. From the Midwest to the Middle East, Starbucks is one of the most widely recognized names in coffee. The company began as a single store in Seattle’s Pike Place Market in 1971 before going global in the 1990s.

At the beginning of 2018, Starbucks is present in  28,000 stores in 75 countries. It may seem as if Starbucks has everyone from 20 to 60 as their target audience.

Starbucks target its offerings to High income, high spenders, urban’ish’ on-the-go busy people, affluent (annual income of $90,000), technology early adopters, healthy’ish’ professionals, socially conscious, and optimistic, flexible to change.

Starbucks attracts consumers who may not be affluent but who will spend their discretionary income on the experience, who may not be urban but live in suburbs with long commutes who like to indulge with a coffee, they may not be coffee drinkers, but who will enjoy tea, snacks and sandwiches. Identifying the target consumer helps Starbucks invest in making business decisions that will resonate with their consumers and their beliefs.

Apple Target Group

The common set of characteristics shared by Apple target group include appreciating design, quality and performance of technology products and services over their prices.

Apple target customer segment comprise well-off individuals who are willing to pay extra for technology products and services with advanced design, functions and capabilities.

Apple segmentation, targeting and positioning is illustrated in the following table:

 

 

Type of segmentation

 

 

Segmentation criteria

Apple  target customer segment

Devices: iPhone, iPad, Mac, iPod Services: iTunes and the iTunes Store, Mac App Store, iCloud, Apple Pay, Operating system & software: iOS, OSX, iLife, iWork Accessories: Apple TV, Apple Watch and related accessories
 

Geographic

Region US and international US and international US and international US and international
Density Urban Urban Urban Urban
 

Demographic

Age 20 – 45 18 – 30 20 – 35 20 – 45
Gender Males & Females Males & Females Males & Females Males & Females
Life-cycle stage Bachelor Stage

Newly Married Couples

Full Nest I

Full Nest II

Bachelor Stage

Newly Married Couples

Bachelor Stage

Newly Married Couples

Bachelor Stage

Newly Married Couples

Full Nest I

Full Nest II

Income High earners High earners High earners High earners
Occupation Professionals, managers and executives Students

Professionals, managers

Professionals, managers and executives Professionals, managers
Behavioural Degree of loyalty ‘Hard core loyals’

‘Switchers’

‘Hard core loyals’

‘Switchers’

‘Hard core loyals’

‘Switchers’

‘Hard core loyals’

‘Switchers’

Benefits sought Sense of achievement and belonging

Self-expression

Speed of service, advanced features and capabilities

Speed of service

Efficiency

Efficiency

Speed of service

Recreation

Self-expression

Personality Determined and ambitious Determined and ambitious Determined and ambitious Determined and ambitious
User status Non-users, potential users Users

Non-users, potential users

Users

Non-users, potential users

Non-users, potential users
Psychographic Social class Middle and upper classes Middle and upper classes Middle and upper classes Upper class
Lifestyle[1] Resigned

Aspirer

Succeeder

Explorer

Aspirer

Succeeder Explorer

Aspirer Succeeder Explorer Aspirer Explorer

 

Start-up & Target Group

Many start-ups are passionate about their product idea and technology. Where they need clarifying questions are with need identification, target consumer and relevance to this target consumer. Early inputs into the “who” in the innovation funnel, building a feedback loop for iterative feedback from consumer segments, prioritizing offerings is the road map for every successful start-up.

 

REFERENCES:

Use Target Marketing & Market Segmentation to Improve Your Bottom Line

Susan Ward – https://www.thebalance.com/target-marketing-2948355

Http://www.barcindia.co.in/resources/pdf/NCCS is the New SEC-Sept 15.pdf. (n.d.). BARC 

http://smallbusiness.chron.com/starbucks-target-audience-10553.html

http://smallbusiness.chron.com/starbucks-its-use-technology-28272.html

https://research-methodology.net/apple-segmentation-targeting-and-positioning/

 

Deepa Soman

Posted by Deepa Soman

Spiritual seeker, people and idea collector and connector, life-long learner and sharer. Founder CEO Lumiere Business Solutions, a marketing research & consulting firm. She designed a business model innovation to enable women professionals to get back to work.

Website: http://www.lumieresolutions.com

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