In other words, working out where you’re going to go after business, and just as importantly, where you’re not.
And while segmentation is more about the market, targeting is most definitely about you and your business.
And to be able to successfully bring the two elements together we need to develop a segment (customer) portrait that both aligns with your offering, and enables a positioning to be developed which appeals to the target market (the customer portrait) whilst differentiating you from the competition.
When segmentation is as good as it can be, and you’ve got an accurate customer portrait, the whole process of targeting and positioning becomes much easier.
It also means that the marketing budget, and your internal resources, are more focused on the potential customers that should generate the largest profits.
“Sophisticated mass marketing doesn’t mean targeting everyone, nor does it mean treating everyone the same. It means understanding the heterogeneity in your market, and then catering for only the differences that matter in order to maximise reach while not eliminating the benefits of scale."
Professor Byron Sharp
When the targeting is complete, we then need to develop the positioning – the final stage before moving on to the tactics (channels and communications).