• Chris King

The Importance of Targeted Marketing

Updated: Aug 2, 2019

At a glance

- 61% of businesses believe they engage customers with the right content, however, 56% of consumers believe businesses need to have a deeper understanding of their needs and 51% believe brands send too much irrelevant content. (Marketo)

- Targeted marketing relies on first dividing the market into segments based on a desired “target customer” using four factors; demographics, geography, psychology, and behaviour

- Once the market has been segmented and a target market has been identified, businesses should evaluate the viability of a target segment using 6 key criteria; accessibility, growth, uniqueness, resources, mission, and measurability


Research by Marketo has revealed that there is a disconnect between businesses and consumers on the successfulness of marketing strategies. Marketo found that 61% of businesses believe they engage customers with the right content, while, 56% of consumers believe that businesses need to have a deeper understanding of their needs and 51% believe brands send too much irrelevant content. This data demonstrates that, although overall brand recognition is still important, today’s consumer wants to know that the company cares what they think and will engage with them using relevant content, create products that they want, and cater to their specific requirements as an individual. This can be accomplished by gaining insights on the segment of consumers through data and market research.

There are two main types of marketing that business use…

  1. Mass marketing, where businesses send out a singular marketing message to as many people as possible through every medium available

  2. Targeted marketing, where businesses differentiate some aspect of marketing message to effectively communicate with a specific, or targeted, group(s) of consumers

Mass marketing came first and uses traditional marketing channels, newspaper, radio, and television to sell the same product, the same way, to as many people as possible. This type of marketing is most recognisable to consumers and is what tends to be implemented most often by large companies and global businesses. Mass marketing is primarily focused on raising consumers’ brand awareness of the business or product, whereas targeted marketing is focused on knowing the consumer and engaging with them. Targeted marketing has become more prominent in recent history, as many of the digital and social media marketing platforms available today provide businesses with the ability to target a very specific customer profile. This marketing strategy is used by large companies, in addition to mass marketing, but it is primarily used by small to medium sized businesses (SME’s), as it is less cost prohibitive and allows SME’s to develop a loyal customer base. As this post is tailored towards SME’s, the primary focus will be on target marketing and, more specifically, how to utilise it to maximum effect.

Why use targeted marketing

There are numerous advantages of targeted marketing; the key benefits being…

  • Cost – On average, mass marketing campaigns cost small businesses more money on than a targeted marketing campaign. Most digital and social media platforms will charge for advertising and marketing based on a cost per click (CPC) and cost per 1,000 impressions (CMI), meaning that business will only be charged a minimal amount, usually less than £1, each time an ad is either seen or clicked. In addition, using traditional channels on a regional scale will be less costly than those same type of channels on a national scale. In theory, only those interested in a business’s product would click on the advert. It is worth noting that due to companies like Google placing adverts at the top of search results, people will often inadvertently click on the links. Businesses would therefore be charged for the pay per click but wouldn’t receive the benefit of an actual customer. So, while pay per click is cheaper than traditional marketing channels in theory, there are still scenarios where businesses can be charged more and not receive as great a benefit

  • Effectiveness - When businesses initiate a targeted marketing campaign, they target a segment of the overall market that they believe will be interested in the business or product. Due to the targeted market segment consisting of consumers that are interested in the business or product, the potential return on marketing investment is higher with a targeted campaign than with a mass marketing campaign where everyone is targeted, regardless of interest

  • Loyal Customers – The key for businesses in finding and developing loyal customers is to first find customers that are interested in the business and its products. Consequently, by continuing to focus marketing strategies towards those interested customers, they have the potential to turn them into loyal customers though continual engagement. According to Gartner Group and research conducted by Bain & Company, 80% of a business’ future profits will come from 20% of its existing customers, and, by increasing customer retention rates by 5%, businesses can expect an increase in profits by 25% to 95%

  • Gain Insight - Targeted marketing strategies can be utilised to target people within a certain area around the business, thereby gaining insight into where their customers live and work. This geographic targeting ability will also help to develop loyal customers due to increased targeted marketing engagement with local people. Insight can also be gained regarding customers wants and needs, i.e. the ability to gain feedback from a targeted market that will be more likely to have interest in the business or offering. This feedback can then be used to improved customer experiences and product / service offerings

Segmenting your market

When identifying target markets, the first step for businesses is to create a profile for the desired target customer by segmenting the overall consumer market based on four factors; demography, geography, psychology, and behaviour.

  • Demographic segmentation involves dividing the market using factors such as the age, gender, ethnicity, and income. A targeted marketing campaign would then be developed to target people of a certain age or gender. After looking at their existing customers, a whisky distillery might decide to target young women between 18-35, as they make up a very small percentage of whisky consumers but represent the biggest opportunity for growth. This is similar to the Jane Walker campaign by Johnnie Walker, which was a marketing campaign targeting women

  • Geographic segmentation is the process of grouping the market based on the geographic location of a person, in relation to a specific point. For most SME’s, this could often involve a radius around the business, locating the customers that live and work closest to the business. However, it could also involve targeting a customer in a location far away from the business. A whisky distillery in the UK may choose to release targeted marketing aimed at Asian tourists due to growing demand for whisky in this region

  • Psychological segmentation divides the market according to what people believe, feel, and or think. For SME’s in both commercial and non-profit industries, being able to target a person with a marketing campaign that is tailored to what they believe, what they like, or what they are passionate about increases the opportunity for a positive reaction to the business or product being marketed. Positive responses to marketing campaigns have the potential to translate into sales and engagement with the business. This could take the form of a targeted marketing campaign that engages with consumers attitudes towards responsible drinking

  • Behavioural segmentation of the market involves dividing the market by how people act and by what they do. For instance, a business on a local high street will want to target people who tend to impulse buy. You could develop a marketing strategy that targets people who regularly host parties or attend the parties of others, using social media influencers that already have a keen interest, to encourage them to bring their whisky of choice to the party

Evaluating market segments

Once the market has been segmented, businesses will need to evaluate the suitability of the market segments and determine whether or not they are a logical choice to pursue in selling products. The market segment suitability evaluation is based on the following factors.

  • Accessibility - Can this segment be reached and communicated with easily by a marketing campaign? A whisky distillery that is targeting 16 to 35 year-old females should aim to communicate and market to them using a channel that they interact with. In this phase of evaluation, the distillery would need to determine firstly what channels of communication would be best to reach this segment, i.e. internet, smartphones, and social media. Next, the distillery would need to design a marketing strategy that would translate well to the particular communication channel and effectively reach the market segment

  • Growth - A small business should attempt to forecast the potential for growth in a market segment so that their business can benefit from market growth and trends. A whisky distillery that is targeting young women between 18-35 will need to determine whether or not this segment will grow as consumers of whisky in the future

  • Uniqueness - It is important for small businesses to assess whether or not a particular segment is already being targeted by numerous other competitors. If there is already existing competition, then the business will need to find a way to market to the segment in a way that stands out. For a whisky distillery, especially in Scotland, this would be particularly relevant as many market segments will already be targeted by whisky distilleries. For a distillery to find a segment that has been previously undeserved, it would be important for them to analyse the current target market segments of their competitors and determine the gaps in their marketing strategy. For example, if none of their competitors are targeting 60-75 year-old ethnic minority women, then that could potentially be a suitable segment for the whisky distillery; only if other criteria analysing that segment’s suitability is also met

  • Resources - Businesses should consider whether or not they have the resources required to reach a market segment and also the required resources to remain competitive. As it is not possible to target every segment, businesses would benefit from listing the most suitable market segments, ranked from most likely to lead to success to least likely, and selecting them until resource limits are reached. In this scenario, a whisky distillery would evaluate whether or not they have the resources to compete against a large spirits company like Diageo. If a Diageo sized company and a lone distillery were both targeting the same market segment, then that segment might not be suitable for the smaller distillery as the resources needed to target that segment might be too great for the distillery to turn a profit. In that case, the distillery could target another segment from their list of potential target segments to achieve a more positive result

  • Mission - Every business will have a mission and objectives that will serve to connect themselves with a market segment. It is necessary for businesses to ensure that when targeting a market segment, the ethos and values of a particular segment mirror or complement the mission and objectives of the business. A whisky distillery that has an environmentally conscious mission statement will be positioned to effectively market to a market segment that also values environmental initiatives

  • Sustainability - Accounting for operating costs, businesses should determine whether the target market has a long term future or will be relatively short-lived, a “fad”. Many whisky distilleries are currently evaluating the gin-enthusiast market segments with regards to the diversification of their own products. Distilleries that operate solely as whisky distilleries are evaluating whether the market for gin is a long-term, sustainable, market, or if it is only a fad. If distilleries decide that the increase in gin popularity is sustainable, then there could be a lot of money to be made in this market. However, it could be a very risky market segment to target if the interest in gin is only short term

Targeted marketing using social media

Having included ways to segment the consumer market and target specific segments, it is worth emphasising the important role that social media plays in targeted marketing. According to research by HubSpot, 84% of millennials (people aged 18-34) don’t trust traditional advertising, but 95% of millennials, follow brands through social media (Keap). Social media is not the only means of segmenting a market and implementing a targeted marketing strategy, but this data highlights how important social media is for businesses in marketing, especially towards younger market segments.

Social media has made targeted marketing easier and more accessible for SME’s by providing businesses with incredibly detailed and segmented demographic information on a familiar platform that is simple to use. Social media platforms give businesses the ability to easily implement targeted marketing campaigns by enabling them to sort through all of the registered users to the platform, using a variety of available demographic, geographic, psychological, and behavioural data. Businesses will still need to determine what their target market is, as social media sites will allow for you to segment their users but will not automatically segment users for businesses. Once businesses have decided on a target market, they will benefit from the level of specificity social media provides, allowing them to target only the users that lie within their target market.

It is worth noting that other digital platforms, not classified as social media, are collecting data from their own customers and users to provide companies to better target their marketing strategies. Companies like Google and Amazon collect data from their customers to improve their own marketing strategies, and also the strategies of other businesses. Businesses can pay for consumer data and analytics from Google and Amazon to improve their marketing strategies and gain further insight into their customers.

If you need support in identifying your ideal customers or to develop a more targeted marketing strategy, contact us and we can help you connect your business with the right customers.

Strathearn Strategic Consulting


+44 (0) 7913 413 699