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Your goal is to figure out who these people and organizations are. To do this you will need to divide them
up into different categories. The process of breaking down all consumers into groups of potential buyers
with similar characteristics is called market segmentation. The key question you have to ask yourself
when segmenting markets is, What groups of buyers are similar enough that the same product or service
will appeal to all of them? [1] After all, your marketing budget is likely to be limited. You need to get the
biggest bang for your buck by focusing on those people you truly have a shot at selling to and tailoring
your offering toward them.
[1] Bruce R. Barringer and Duane Ireland, Entrepreneurship: Successfully Launching New Ventures, 3rd ed. (Upper
Saddle River, NJ: Prentice Hall, 2010).
5.1 Targeted Marketing versus Mass Marketing
LEARNING OBJECTIVES
- Distinguish between targeted marketing and mass marketing and explain what led to the rise of each.
- Describe how targeted marketing can benefit firms.
- Explain why companies differentiate among their customers.
Choosing select groups of people and organizations to sell to is called targeted marketing,
or differentiated marketing. It is a relatively new phenomenon. Mass marketing, or undifferentiated
marketing, came first. It evolved along with mass production and involves selling the same product
to everybody. You can think of mass marketing as a shotgun approach: you blast out as many
marketing messages as possible on every medium available as often as you can afford. [1] (By contrast,
targeted marketing is more like shooting a rifle; you take careful aim at one type of customer with
your message.)