INMA_A01.QXD

3 needs of each segment, in particular, unmet needs;
4 organisation and competitor offers and proposition for each segment across all
aspects of the buying process.

Stage 2 in Figure 4.12 is target marketing. Here we select segments for targeting online
that are most attractive in terms of growth and profitability. These may be similar or dif-
ferent compared with groups targeted offline. Some examples of customer segments that
are targeted online include:

 the most profitable customers– using the Internet to provide tailored offers to the top
20 per cent of customers by profit may result in more repeat business and cross-sales;
 larger companies (B2B)– an extranet could be produced to service these customers, and
increase their loyalty;
 smaller companies (B2B)– large companies are traditionally serviced through sales repre-
sentatives and account managers, but smaller companies may not warrant the expense
of account managers. However, the Internet can be used to reach smaller companies
more cost-effectively. The number of smaller companies that can be reached in this
way may be significant, so although the individual revenue of each one is relatively
small, the collective revenue achieved through Internet servicing can be large;
 particular members of the buying unit (B2B)– the site should provide detailed informa-
tion for different interests which supports the buying decision, for example technical
documentation for users of products, information on savings from e-procurement for
IS or purchasing managers, and information to establish the credibility of the com-
pany for decision makers;
 customers that are difficult to reach using other media– an insurance company looking to
target younger drivers could use the web as a vehicle for this;

STRATEGY FORMULATION

Figure 4.12Stages in target marketing strategy development

Informed by

Segmentation

Identify customer

needs and

segment market

Target marketing

Evaluate and select

target segments

Positioning

Identify proposition

for each segment

Planning

Deploy resources

to achieve plan

Market research

and analysis of

customer data

Demand analysis

Competitor analysis

Internal analysis

Evaluation of

resources

• Market segment definition


• Target segments


• Online revenue contribution
  for each segment


• Online value proposition


• Online marketing mix


• Online marketing mix


• Restructuring

Stage of target marketing Informs