Introduction

We often speak of “target clients”, “target consumers”, “target market segments”. But how is it possible to identify them? Which variables are necessary to consider, which reasoning has to be followed?

There isn’t a scientific method, but in this unit you can find some useful points to consider, examples of a reflection process that you can reproduce, adapting it to specific situations.

Human needs, from lower to higher according to Maslow

Click on this image to enlarge

Let’s first of all consider the classification of criteria you have seen in Module I Unit 2 ...

By reading specialised magazines and newsletters, and / or exploring dedicated websites, besides using our own common sense, we can associate each category to possible specific needs. While doing this, there can emerge the needs of further segmenting a category: for example, people over 65 years old can be divided into those who are perfectly fit, go to a gym, choose a healthy diet, etc., and those who are not so well, and need special services and medical treatment. This may depend on age, but mostly on lifestyles, so, if we are interested in this target, we’ll have to look for data that will help us assess how many of the first type there are and how many of the second type. Can this be related to their level of education? In this case, we shall use education as a proxy of the variable that we want to study.

On the next page, you can see a few hypotheses expressed, to be tested in practice. Of course, they are not valid in all cases, and have to be adapted to circumstances (city? countryside? Uk? China?, etc.)

Examples to consider

Climate: people who live in hot places (or during hot seasons) may be more interested in products which provide minerals to the body; people living in cold places may prefer «heating» food, hot drinks, herbal teas, etc.

Culture and areas: women living in large cities may feel less «guilty» if they buy ready meals, than women living in small towns or in the countryside, where the role of woman in the family may be strongly related to cooking. This can also be related to age, with younger women being more «free-thinking» than mature ones. Things may change with advancing age: single older people seem to be interested in buying ready meals in supermarkets.

Country: people in different countries may have quite different choice parameters concerning the same product. Some may like a fruit to be very ripe, others may prefer it unripe; some may prefer ham with little fat, others may think that fat adds taste; some, who are used to processed oils, may prefer olive oil with a delicate taste, others, who are used to extra virgin olive oil, want a strong taste and a rich flavour. These are very important things to know before designing a product, and they can be tested both in preliminary analyses and in compared concept tests, before designing the product

Kind of family. Families with small children have a very different behaviour compared with families with no children or grown-up children. They need different kinds of food, different volumes, and may have a different price sensitivity and a different attitude towards organic food. Single people may pay less attention to price and more attention to service: some of them are very health conscious.

Place of purchase. Educated and well-off people often prefer to buy in high – end supermarkets and delicatessen shops. Moreover, some of them have developed a preference to buy online, and a loyalty for specific e-commerce gourmet sites. Young, working people are always in a hurry, and appreciate (and pay for) all kinds of services that can help them save time. Elderly / retired people, if they are healthy, may, instead, prefer a shopping experience where they meet people, have a chat, the preferred service being, possibly, the home delivery of heavy parcels and bags.

Gender: generally speaking, women, may be more attracted by communication based on emotions, whereas men are particularly interested in technical, matter-of-fact messages

Gender: women tend to be more health-conscious than men

Consumption occasions: the behaviour of a man buying wine only on special occasions, once in a while, and that of a man who drinks wine everyday may be different. And by «behaviour» many elements are meant: the time spent reading labels, the need of assistance, the interest for variety, the attention to price and to the external aspect of the bottle ...

Risk: well-off people associate a lower level of risk when buying a product since the cost impact on the total family budget is not high (they might even throw everything away and buy the same things in another place). If their education level is high, they could, nevertheless, associate a higher risk with the purchase when the quality is not explained or guaranteed, because they know enough about nutritional aspects and possible effects of low quality food. They may be more interested in origin and regional features.

Loyalty: consumers who do not perceive or understand quality will be less loyal, will choose on a price basis, might not appreciate low fat, functional products, may prefer larger portions and less variety.

Willingness to pay: when a product characteristic is taken for granted (consumers think that all products have it, even if it is not true), they may not be willing to pay a price premium for it (for example, if they assume that all apples sold in the market are not imported, and you try to get a price premium for national food). The same goes if consumers cannot understand the real benefit offered by the product, or do understand it, but do not regard it as particularly important

Innovation: there are consumers who love to try new things, and are very useful in marketing, the first to be addressed. Other consumers love tradition and would never go away from it.

Home cooking: an increasing number of families in Europe seems to appreciate home cooking: this fact opens a space for products and ingredients that are easy to cook and can add a «special» touch to a dish

Ego: some consumers want to show that they are connaisseurs. The product packaging and communication on the product may attract their interest (artisanal product, special production process, particular origin, very small production ...)

A possible mental path: From product features to market segments

How to use this page: product characteristics are linked to special needs, and these needs can be linked to special market segments / groups of clients. There is virtually no end to the possibilities that can be envisaged, but here you find an example of how to reflect.

You can apply this example to a product you would like to sell, to answer the questions: to whom? why? when? how?

Freshness / perishability is related to the possibility to store it, (and frequency of consumption) and of transportation, and this is important both if end users and intermediaries are involved. A very busy person may appreciate highly perishable products, but may not be able to handle them.

A perishable product needs tense logistic flows. Whilst particular attention must be given to stock management for a product with a long shelf

Freshness can also be related to the nutritional value, and this is very important, for example, when promoting direct sales by farmers to consumers. Health conscious consumers, and consumers who have time (retired persons, housewives) may be particularly interested in the freshness variable

New products mostly attract young people, unless they are new in the sense that they offer a traditional product in a particularly convenient way

It may be no use, if you want to address young generations, to speak of traditional production processes, of ancient seasoning methods, since most of them have international, standardised tastes where tradition has a minor role. A lot of communication is needed in this case, to educate consumers

Instead, traditional, local, regional products are highly appreciated by high – end, adult consumers. They benefit from having «a story to be told»

Restaurants may be interesting targets

In this case, storage problems may or may not arise, and in case of bulky products the service one offers, either towards retailers and wholesalers or towards end users, both in store and in e-commerce, has to do with packaging and storing facilities.

Small products can be communicated as easy to use, easy to carry, suitable for snacks at school and in office, and can prove particularly interesting for people who work, who often travel, who are always in a hurry.

A small, light product with a high level of service embodied can end up having a rather high €/kg price ...

Smooth products can be particularly and expliciltly addressed (packaging, messages, ...) to small children and elderly people

Smooth products need particular attention when transported (packaging, means of transport ...)

Juicy fruits and vegetables can be particularly suitable for centrifuged juices, and can be targeted at health – conscious consumers

Expensive products must be addressed to consumers who are able to appreciate their features, and regard them as important according to their lifestyle.

Positioning has to be very clear. Everything must be coherent: packaging, images, colors, messages,.

In difficult periods, some people who would not buy cheap products have to buy them. In this case, if your product is cheap, integrated communication may make them feel better, making them feel that they have made a good choice in any case

The weight of the product has to do with transportation costs and means.

According to the type of client (B2B. B2C and in this case young or old, travelling by car or by bus / metro, having or not having children by the hand), particular attention must be paid to the delivery service.

Transportation costs must be carefully analysed in the profit & loss account

The transport of light but bulky products may be particularly expensive: there may be a distance after which it is no longer cost-effective

This becomes particularly important if among your target markets, there are foreign countries

Quantitative field research tools

PAPI	Paper And Pencil Interviewing. Data obtained from the interview is filled in on a paper form using a pencil.
CAPI	Computer Assisted Personal Interviewing. This method is very much similar to the PAPI method, but the data is directly entered into a computer programme instead of first using paper forms.
WAPI	Web Assisted Personal Interviewing. The respondents answer the questions online, but they are also assisted online in doing so.
CASI	Computer Assisted Self Interviewing. The CASI method involves respondents taking place behind the computer themselves in order to fill in the questionnaire.
CAWI	Computer Assisted Web Interviewing. Online research in which data is obtained electronically using online questionnaires. These questionnaires contain references so that the correct questions are asked to each respondent.
CATI	Computer Assisted Telephone Interviewing. The questions are usually presented to the interviewers on a computer screen, after which they ask them to the respondents. To ensure that the correct questions are asked to each respondent, the specialised computer software uses "skips": Certain answers can lead to the next question being different. This also prevents the respondent from having to answer irrelevant questions.
TAPI	Tablet Assisted Personal Interviewing. This method is virtually identical to the CAPI method, but the data is entered into a tablet instead of a computer/laptop.
TASI	Tablet Assisted Self Interviewing. This method is virtually identical to the CASI method, but the data is entered into a tablet instead of a computer/laptop.
SAPI & SASI	SAPI: Smartphone Assisted Personal Interviewing. With this method, the data is entered into a smartphone by the interviewer. SASI: Smartphone Assisted Self Interviewing. With this method, the data is entered into a smartphone by the respondent.

Competitor benchmarking

It is very important that companies compare themselves to their competitors because ... that’s what clients do all the time, and the way they choose! What you have to do is 1) to identify your main competitors IN THE MARKET SEGMENT concerning your business and marketing plan 2) if there are too many, choose a few competitors who, because of their characteristics, mostly resemble the type which you feel are more dangerous. 3) Write a list of the features you want to examine. What do you have to compare? All characteristics that enter the competitive game in this specific case. Let’s see a few of them. And how can you get information? By observing, visiting stores, talking with clients ...

Positioning	What is your competitors positioning in customers’ minds? Do they regard his product as high – end, medium level, discount level? And what is your positioning in comparison?
Benefit for consumers	Is your competitor’s product more or less effective and/or efficient in responding to customers’ needs?
Service	What is his level of service? Pre and post-sale assistance? Delivery? Organisation? Administration? And yours?
Promotion	Does your competitor promote his product adequately? How much do you estimate that he invests in communication? Which media does he choose? Is he communicating on social networks properly? How is his website? Is it nice, easy to navigate, updated, rich? What is the unique selling point he uses? How high is is brand awareness (which means that consumers recognize his brand and can say which values it is linked to)? And his reputation (is he «well known» because of ethics, quality, traceability, environment friendliness)? And what about you?
Competitive analysis	How does your competitor face competition? Has he achieved competitive advantages? Has he developed a bargaining power vis a vis suppliers? Have his clients become so loyal to his brand that it would be expensive – in terms of promotion and innovation – to make them change their mind? Is it difficult, for another company, to sell a similar product and attract clients just saying «me too»? Are high investments needed to enter the market segment where he is incumbent?
Price	What is your competitor’s price strategy? Is he a price taker or a price maker? Is he able to obtain a price premium, because of his perceived quality? How is his price compared to yours? Higher? Lower? Why? Do you think the difference is justified?
Cost structure	Are you able to find information about your competitor’s cost structure, to be compared with yours? Is his financial statement available? By comparing costs, you might discover that there are ways to reduce the incidence of particular costs ...
Performance	If the finance statement is available, you might compare margins and profits, and if it refers to different years, you can also compare trends ...