Category: Targeting

Buyer Personas versus Target Markets- What’s the Difference?

target vs personas

If you have done any reading lately on how to effectively implement content marketing and social media into your marketing strategy, you have likely come across the concept of buyer personas. In fact, understanding and clearly defining buyer personas is widely considered to be the first step to successfully engaging customers and leads via digital marketing. But if this talk about buyer personas is foreign, you may be wondering how personas relate to a cornerstone element of marketing strategy- your target market. Let’s delve into this issue by comparing personas and target market along certain key characteristics.

First, Some Definitions

Before going any further, defining buyer persona and target market is a logical starting point:

Buyer persona- Research-based archetypal (modeled) representations of who buyers are, what they are trying to accomplish, what goals drive their behavior, how they think, how they buy, and why they make buying decisions, where they buy as well as when buyers decide to buy. (Source: Tony Zambito)

Target market- The particular segment of a total population on which the seller focuses its expertise to satisfy that submarket in order to accomplish its profit objective. (Source: American Marketing Association)

Both concepts pertain to customers, but the similarities pretty much end there.

What’s the Difference?

The concepts of buyer persona and target market represent two different approaches for identifying potential customers and using insights gleaned to devise marketing campaigns to reach them. Below are five characteristics along which personas and targets are compared:

Characteristic

Buyer Persona

Target Market
Scope Individual Aggregation
Focus Persons (Buyer, customer, or user) Likely buyers
Influencers “Life characters” (e.g., family, friends, colleagues) Other targets (e.g., aspirational groups)
Data Points Personal story lines (Priorities, successes, obstacles faced) Descriptive traits (demographics psychographics, and behaviors)
Marketing Focus Gathering and understanding buyers’ stories in their own words Capturing historical data, trendspotting, and customer research

Buyer personas get to the heart of the marketing concept: Satisfying needs and wants. The research required to gather insights into the who, what, why, when, and where of their lives allows for a clearer view of the audience a business is attempting to serve. Why? A persona distills the crowd down to individual customer types. In contrast, target marketing historically has focused on aggregation- how to logically group together people or firms with similar characteristics that are our most likely buyers.

The difference in scope between buyer persona and target market is the most significant difference between the two concepts because it accounts for the contrast in the other four characteristics identified in the table above. It is no coincidence that the term buyer persona contains the word “person;” the characteristics of a buyer persona all relate to the person with whom you desire to engage in a relationship with your brand.

Don’t Discard Target Marketing

The purpose of this discussion is not to ask you to choose between buyer persona and target marketing as the tool of choice when formulating marketing strategy.Personas and target markets should play complementary roles in managing customer relationships. Target marketing is useful because it is a first step in reducing the population of potential buyers to smaller pools of the most likely buyers and users of your products or services. The need remains to drill down deeper to understand each segment you serve and in turn, how to respond to them via product design, distribution strategy, and brand communications.Creating buyer personas meets that need, providing clarity that can equip you to better serve current customers and successfully attract new ones.

 

 

 

 

The True Value of Value-Priced Product Lines

A marketer’s dream is to achieve healthy profit margins on every product sold. The fundamental customer value equation of benefits received compared to costs to acquire and consume suggests increasing value is as simple as either adding benefits or reducing costs. Product positioning can follow one of these two routes, focusing on either value via a benefit provided (e.g., quality, craftsmanship, performance, or image) or cost (e.g., low price or extended payment terms). In order to succeed in staking a distinctive position for value proposition and positioning, it seems inevitable that a decision must be made to focus either on benefits or costs. What if I told you it may be necessary to deliver value through more benefits and lower costs?

Wendy’s Split Personality

One brand that realizes a need to offer value in the forms of benefit focus and cost focus is Wendy’s. The quick service restaurant chain is locked in a battle not only with direct competition from burger chains like McDonald’s and Burger King, but gains by Taco Bell and Subway are an additional threat to business. Wendy’s has experienced modest store sales increases, but management is concerned about sluggish sales of its value menu. Wendy’s was a leader in establishing the value-priced category more than a decade ago, but it has been eclipsed by McDonald’s in appealing to the taste buds of price-sensitive diners. At the same time, Wendy’s has worked diligently to carve out a brand position of quality and premium products that can command higher price points. Can Wendy’s be an upscale burger brand and a value-priced brand at the same time? Not only can it, but Wendy’s must be both.

The Benefits of Multi-Segment Targeting

Positioning a brand to appeal to two different market segments seems to run counter to admonitions to focus and not try to be all things to all people. However, there are compelling reasons to develop separate product lines for upscale and value markets:
  1. Captures greater sales potential – There are sales to be had in both upscale and value markets. A decision to focus on one segment only is a choice to forego revenue opportunities. In Wendy’s case, it is not a great price distance between the premium-priced fast food burger and the value offering. Thus, the brand position is not compromised by selling products at different price points.
  2. Can bring new customers to the brand – Value priced offerings can be viewed as a form of sampling. They can be a way to bring customers into your business to try your products. If they are strictly buying on low price, you have something that appeals to their needs. If they can be up-sold, the value line has served to build brand credibility and opens the door to extending the relationship by selling more profitable products.
  3. It is a competitive necessity – Sometimes, offering a downscale product line may not be a desirable decision, but lack of a value-priced line could put a brand at a competitive disadvantage. In Wendy’s case, it may be tempting to say “forget the value menu- let McDonald’s have those customers and focus on the upscale market.” Nice concept, but it could create a disastrous scenario in which customers switch to a brand that offers greater choice.

There’s the Beef

The above points support a brand segmenting the market to appeal to value conscious buyers as well as tapping more profitable opportunities by offering products that have benefits valued by buyers. I like how Wendy’s has its value menu positioned as “Right Price Right Size.” This approach is not strictly about low price; consumers concerned about calorie intake would perceive value in this product line for reasons other than low price points. Therein is the key consideration: Multi-segment targeting is not about high price and low price; it answers the buyer’s question “what’s in it for me?” Reality is that one product line cannot appeal to diverse customer needs. It is OK to take a brand downstream to serve price conscious buyers… to a point. If brand credibility can be maintained, moving into lower priced markets can be a way to find new customers and fend off competition.

Cap’n Crunch Offers a New Definition of Retargeting

The practice of retargeting, or serving Internet surfers ads based on previous online behavior such as pages visited, is synonymous with digital marketing. However, it is possible that retargeting is not limited to online advertising. Cereal brand Cap’n Crunch seems to have created a new twist for what retargeting means. The brand is 50 years old, debuting on stores shelves in 1963. Like many cereal brands, Cap’n Crunch sales have become stale. Competition from private labels and a push to de-emphasize sugary cereals led the brand to the edge of extinction as recently as 2011. Today, Cap’n Crunch appears  to have new energy, and it can thank a new conceptualization of retargeting for it.

So what is this new meaning of retargeting? Cap’n Crunch is turning its marketing efforts to its former users- adults who ate Cap’n Crunch in their younger years. External pressures on cereal marketers to not target children in advertising has created a need to think differently about how to communicate the brand without running afoul of advocacy groups intent on eliminating advertising to children. A late-night Cap’n Crunch talk show will debut on the brand’s YouTube channel on May 7. New content will be added every other week through the summer. The animated show will feature Cap’n Crunch doing mock interviews of celebrities and fictional characters. The character may have the appearance of being for kids, but the content of the Cap’n Crunch Show is aimed squarely at adults.

Any brand fighting for survival is actually in a fight to remain relevant. What audience segment can relate to Cap’n Crunch best? Its former target market- people who enjoyed Cap’n Crunch growing up but moved on to other breakfast options as they got older. Now, Cap’n Crunch hopes to tap feelings of nostalgia among ex-fans and influence them to introduce their children to the brand. Cap’n Crunch sees its best option for maintaining and growing brand relevance resides in trying its own form of retargeting to connect the target audience with their past.

Marketing Daily – “Cap’n Crunch Launches YouTube Talk Show for Adults”

Targeting for Precision, not Imposition

Online travel website Orbitz caused somewhat of a stir recently when it acknowledged that it showed pricier hotels in search results for Mac users compared to PC users. The idea that search results would be influenced by the type of computer one uses was unsettling to some people who are worried about a company knowing too much about people on the other side of the computer screen. Also, some consumers perceived the tactic as Mac users being subjected to differential pricing. Of course, that is is not the case – Mac users are only seeing different results on the first pages of their search queries, not being charged different prices.

As a marketer and consumer, I applaud Orbitz’s data mining efforts to seek to match product options with a buyer’s characteristics. The practice is hardly new – market segmentation is a default strategy because not every buyer wants what you sell. Also, a firm has limited marketing resources; finding the most likely buyers saves the firm money and makes consumer search more efficient by being exposed to more relevant messages from advertisers. The rationale behind Orbitz’s targeting tactics is no different than what a business does when it decides it wants to air radio advertising. The company finds whose listeners’ characteristics match well with the advertiser’s target market. The company does not air commercials on every station in town; they find the most likely buyers via a station’s audience.

One of the advantages of search engine marketing for consumers is efficiency in carrying out information search. The Internet casts an unbelievably wide net – too wide to be beneficial without a means for sifting through vast data and pinpointing information that is most likely to be of interest. Marketers should follow Orbitz’s example and examine how they can better match their offerings with consumer characteristics. Opportunities exist in online and offline contact points to make interactions more relevant by revisiting how targeting decisions are made.

Los Angeles Times – “Is Orbitz Being Creepy or Smart?”

Don’t Be Afraid to Go Downscale

One of the most significant effects of the recession has been consumers scaling back purchases in many ways, including trading down to purchase lower priced brands. It is an alternative to eliminating purchase of a certain product altogether. Serving customers in downscale segments has always been a delicate situation for marketers. On one hand, the potential to generate revenue from customers that may not be able to afford a company’s core brands can be reached through value priced offerings. On the other hand, a foray into value segments could have a negative impact on image perceptions of the core brand. A common strategy for managing this dilemma is to create a separate brand identity to distance the lower priced brand from the core brand. But, this approach diminishes the ability to leverage the strength of the core brand.

Coach is a brand that has enjoyed a brand positioning as a luxury lifestyle brand, the very type of brand that was vulnerable to consumers forgoing it for a lower priced alternative. What made Coach particularly vulnerable was that its core product, handbags, is more of a discretionary purchase, meaning that consumers might postpone buying a Coach handbag or trade down to another brand. Its response to the recession: tackle the shift in consumer behavior head-on with a line of lower priced handbags. Coach’s Poppy Collection carries an average price of about $200 compared to more upscale products priced at $400 and higher.

Is there a risk to a brand like Coach to entering lower priced markets? Yes, although some people would argue that a $200 handbag is not exactly a value priced offering! A branding strategy that isolates lower priced products to a certain line or group like the Poppy Collection is a way to protect core brand associations while enjoying the benefits of tapping into Coach’s brand equity. It is a matter of practicality versus pride; strong sentiment to “protect” a brand may steer strategy away from entering lower priced markets, but practicality recognizes that consumer behavior has undergone a distinct change. Product development should be guided by meeting customers’ needs, and at a time when the psyche of the consumer is still fragile that means exploring options in downscale markets that meet consumers where they are.

Marketing Daily – “Coach Makes Big Gains on Small Prices”