Last Updated: November 28, 2020
Southwest Airlines advertises itself as a low-cost, low-frills carrier with frequent flights to many destinations around the United States. The airline focuses its marketing efforts on middle-class families, small business owners, those traveling short distances, and young adults.
Conversely, United Airlines focuses its marketing on individuals who are college educated or have graduate or post-graduate degrees, are employed full time (particularly in a management or executive position) and have a household income of $50,000 or more. This is because business travelers are more likely to pay in full for airfare than those traveling for pleasure.
In addition, those with a higher income often select first class options over economy class. Because of this targeted marketing, United sells more full-cost fares and increases their overall revenue.
Airlines identify those who are more likely to respond to their particular offerings, such as low fares for middle-class earners or more luxurious accommodations for affluent business executives using targeting marketing strategies. (See also Marketing Airlines)
Targeted marketing appeals to individual demographics or preferences, causing those who view targeted marketing tactics to respond and purchase the advertised product or service. In turn, companies find that this highly effective advertising results in increased overall sales and brand awareness.
What is targeted marketing?
Four Key Targeted Marketing Strategies
- Geographic Strategies find audiences in a certain location, such as a certain state or neighborhood.
- Demographic Strategies find audiences with certain characteristics like race, age or gender.
- Psychological Strategies look for desired personality attributes such as religion or previous purchases of a certain product.
- Attractiveness and Relative Ability – Once these elements have been determined, the focus of the marketing campaign is narrowed by determining if the identified audience is likely to be interested in the specific product. This is evaluated in association with the ability of the company to meet that audience’s needs and wants.
Targeted marketing identifies an audience likely to buy services or products and promotes those services or products to that audience. Once these key groups are recognized, companies develop marketing campaigns and specific products for those preferred market segments.
Promotional messages and advertisements are sent to those primary groups instead of mass marketing without regard to the specific characteristics of the audience. (See also Niche Marketing)
For example, the company Glaceau began to market its vitamin-enriched water to men and women between the ages of 18 and 49 who indicated that they were interested in health and fitness. Because of this targeted marketing, the Glaceau Smartwater brand grew approximately 28 percent in less than a year.
Who implements targeted marketing campaigns?
Companies that offer specialized products or services typically benefit the most from using targeted marketing strategies. Focusing marketing efforts on specific groups who are more likely to respond increases the chances that the marketing efforts will be relevant to those groups. When marketing is relevant, people are more likely to spend money on that service or product.
In addition, targeted marketing typically provides specific information and incentives to people, giving them a reason to choose that company over competitors in the same industry.
For example, Starbucks currently holds the largest market share of the coffee industry in the United States. The company focuses its advertising on women and men between the ages of 25 and 40 who live in urban areas, have moderately high income and professional careers, and demonstrate an interest in fair trade and social welfare. Starbucks bets that these key groups are more likely to spend money on specialty coffee drinks and products.
In addition, Starbucks targets young people between the ages of 18 and 24 by providing a comfortable, appealing place where they can sit and chat, study, or work. Starbucks also stays active on social networking websites, further appealing to the 18-to-40 demographic. This encourages younger adults to “follow” Starbucks on social media sites, increasing brand awareness and encouraging people to spend their time (and money) at Starbucks locations.
Well-Known Target Marketing Campaigns
The female contraceptive pill Yaz airs television advertisements during episodes of the Bravo channel reality TV show “The Real Housewives of Orange County”, which has a primary demographic of women between the ages of 18 and 49. Not coincidentally, this is the same demographic of users most likely to use an oral contraceptive.
Pepsi-Cola Company was struggling with slow sales of its Mountain Dew flavored soda because consumers viewed the soda as something primarily consumed by low-income individuals in rural areas Essentially, Mountain Dew was not considered “cool.” As a result, an ad campaign targeting youth between the ages of 18 and 24 in urban areas featured skateboarder Paul Rodriguez and hip-hop artist Lil’ Wayne was launched in cities such as L.A., New York City, New Orleans and Miami. This ad campaign was design to respond to trends in popular music and sports, getting the attention of young hipsters in urban areas by implying that hip-hop artists and skateboarders prefer the taste of Mountain Dew to other soda brands. Because of this targeted marketing effort, overall sales of Mountain Dew increased.
How is a targeted marketing campaign deployed?
Companies used targeted marketing to learn more about their primary audience for a specific product or service, allowing the company to focus efforts on advertising to those most likely to respond (See also Scientific Marketing). Targeted marketing is usually much more effective than mass marketing, which tends not to consider the qualities of the consumer who views an advertisement.
A targeted marketing plan starts with the identification of primary audience segments. For example, an online social gaming company might choose to perform market research to discover specifically who uses online social gaming apps the most.
Once data is collected, companies eliminate individuals who are less likely to respond to their targeted marketing efforts and focus on those who might be more interested. For example, if people under the age of 18 and over the age of 60 are less likely to play online social games, the online social gaming company will want to tailor their advertising efforts toward people between the ages of 18 and 60.
After identifying a key audience, companies can deploy marketing efforts specifically at that audience. Potential marketing campaigns include promotional emails, mailed coupons, text messages, and online banner ads. In the online social gaming example, the company focuses advertising for the game at males and females between the age of 18 and 60 and encourages these individuals to download the game by sending them ads promoting the benefits of the game.
Once the sales and marketing campaign launches to the targeted market segments, the company follows the results of the campaign. Sales of the specific product are monitored to determine the success of the marketing campaign, such as how many times the new online social gaming app is downloaded. The online social gaming company might determine that women between the age of 30 and 45 download the game the most, while males between the age of 18 and 30 download the game the least.
Based on the results of the sales and marketing campaign, the company may alter or change the format of the marketing campaign or expand their defined target markets to improve future sales. Future advertising for the online gaming company might focus on appealing to middle aged women and focus less on young men, if females between the age of 30 and 45 are shown to have the most interest in the game.
What types of careers use targeted marketing campaigns?
Market Research Coordinator
What do they do?
Targeted Marketing Salaries
- Market Research Coordinator
Top Earners: $111,440+
- Social Media Manager
Top Earners: $166,400+
- Director of Advertising
Top Earners: $112,800+
Source: Bureau of Labor Statistics
A market research coordinator identifies market trends and creates marketing campaigns specifically designed for certain audiences. The position requires the ability to understand consumer behavior and predict spending trends.
Education and Skills
A bachelor’s degree in marketing is required, as is a basic understanding of marketing principles and techniques. Professional experiencing in a marketing-related position is desirable as well.
Social Media Manager
What do they do?
As the popularity of social media grows, so does the need to use social media for business purposes. A social media manager plans and executes marketing campaigns using online social media networks such as Facebook and Twitter. Within this position, social media is utilized to increase visibility of the company and interact with targeted markets in order to increase brand awareness and sales.
Education and Skills
A social media manager needs a bachelor’s degree in marketing as well as several years of social media experience. Companies are seeking candidates with extensive personal and professional social media experience as well as an understanding of online search engine optimization and target market analysis.
Director of Advertising
What do they do?
A director of marketing helps guide an entire company’s marketing efforts. This includes using targeted marketing as well as other marketing strategies such as data collection and analysis to decide the best audience for specific advertising campaigns. The director of marketing oversees all current marketing campaigns and creates new marketing efforts directed at the audience most likely to respond. This includes creating online, television and print advertisements, and managing the deployment of these ads.
Education and Skills
A director of advertising needs at least a bachelor’s degree in marketing, although a master’s degree in marketing is preferred. In addition, a job candidate should have several years of experience with targeted marketing and advertising campaigns.
How can a marketing school help you succeed?
Our Recommended Schools
Marketing degree programs teach students how to understand human behavior and how to apply that understanding to business and marketing. Gathering this data requires a significant amount of mathematical skill, requring marketers to model data points and base their goals on data analysis.
Additionally, marketing courses include learning about associated concepts such as scientific marketing, which collects and analyzes statistics and information about the marketplace to make decisions about marketing campaigns. Students also learn how to analyze market trends to find target advertising opportunities and execute a campaign for those selected market segments.
Those with bachelor’s degrees in marketing have the specific skills that companies seek. To learn more about how a marketing degree can help you build a successful marketing career, request information from schools offering marketing degrees today.
Powerful Targeted Marketing
Breakfast cereal brands Kellogg’s and General Mills are responsible for approximately 650 television ads per year promoting pre-sweetened cereal. These ads are shown primarily during shows specifically designed for toddlers and young children.
A Yale University study of this targeted marketing found that almost 50 different kinds of cereal were shown to kids on television, online, and displayed at their eye level in stores on a regular basis.
Because of this type of advertisement, the Kellogg’s brand sells the most types of pre-sweetened cereal with almost 17 percent of total sales by volume. General Mills follows with approximately 12 percent of the market share for pre-sweetened cereal sales.