Tactical Segmenting and Targeting

Tactical targeting involves identifying cost-efficient and effective ways to deliver products and services to viable customers. A profile-based targeting identifies the observable characteristics of customers. When determining a customer profile, a company can mainly rely on four factors that include demographic, geographic, behavioral, and psychographic factors. This paper analyzes different companies that use profile-based targeting by showing how Apple uses demographic factors, McDonald’s uses geographic factors, and Amazon uses behavioral factors.

Analysis 

Demographic Factors 

Demographic factors can include the descriptive characteristics identified in customers such as their gender, age, occupation, income, religion, level of education, nationality, ethnicity, employment status, household size, and social class. Apple primarily makes use of demographic factors such as age and income for its marketing. Young people are usually a target for the company due to their love for technology and music. They are perceived to be more receptive to new technologies and are insensitive to high prices. Apple has developed various products was convenient for teenagers. For instance, the iPod was a device that could play music just like the iPhone. Young adults that did not necessarily have the money to spend on the iPhone found the iPod device affordable.

Apple targets the income and social class by targeting middle- and high-income individuals and those of a higher social status. People in the middle and upper households have an extra income to spend on the company’s luxury products. The company thus mostly advertises itself as a premium brand with well-designed products (Payne, 2017). The other demographics that the company targets are business and media professionals. It strives to enhance the design and features of its products to be suitable for the business professional. Apple also includes gender by producing masculine and feminine colors in some of their products. Creating products based on the target demographics has made Apple a well-recognized and highly successful brand.

Geographic Factors 

Geographic factors show the physical location of customers by identifying them based on their permanent residence, country, state, city, and neighborhood. McDonald’s is an international company that spans multiple geographic locations. The company divides its target markets by region, country, and cities. It then customizes its menu based on local preferences and uses advertising strategies that would fit the given area. For instance, the Big Mac is marketed as a beef burger in the United States. However, the Indian geographical market does not take beef. The company thus introduced the Maharaja Mac with no meat but chicken (An, 2020). McDonald’s has used such a strategy in different geographic locations. Providing products in line with geography and culture shows that the company respects the local beliefs and traditions, improving its public image.

The advertising strategy for McDonald’s is based on the geographic location. In the United States, McDonald’s makes use of multiple new product trials and innovation and advertises it to the young population. The advertisements are different in Japan as they focus on adults and are unique to the Japanese culture. McDonald’s provides a Teri Tama Burger, and Tsukimi Burger meant for the Japanese population. The company also uses foreign words to label its products to sound attractive and improve the effectiveness of the advertisements. In China, McDonald’s has approximately 2,700 outlets and has adapted to the local preferences and tastes. Chinese burgers use chicken thighs in their meat as chicken thighs are preferred by many locals. It also provides promotions in the form of a grilled chicken burger served during the Chinese New Year. The success of McDonald’s in different geographical locations can be highly attributed to its geographic targeting.

Behavioral Factors 

Behavioral factors involve analyzing a customer based on the previous experience with a company. For instance, there can be new customers, loyal customers, and customers from competitors. It can also analyze the frequency of purchase, quantity purchased, sensitivity to prices, response to promotions, and customer decision process. Amazon makes use of behavioral factors by using big data to get customer information. The company then uses an advertising algorithm to personalize recommendations and advertisements for every customer (Kauffmann et al., 2020). The algorithms also consider customer perceptions of different products by acquiring data on the rating reviews. It identifies what a customer would like to buy and when to provide the right recommendation at the right time.

Amazon’s online retail store incorporates different products, and customers can feel overwhelmed and lose track of what they would like to purchase. Amazon strives to solve the problem by making better recommendations. The company gathers data from every customer that browses through the site. Using such data helps Amazon have a 360-degree perspective of every buyer. For instance, based on previous purchases, the company can determine that a buyer is a male between 20 and 40 years, lives in a rented apartment, has an annual income of over $40,000, and enjoys foreign films. The company can use the data and make recommendations based on what other customers with a similar profile like.

Pros and Cons of Profile-Based Targeting 

The two main pros of profile-based targeting are that it is an effective and cost-effective way to reach its customers. It is effective in ensuring that advertisements and product offerings will suit the profile of a customer. It is cost-effective in improving a company’s conversion rate for its products. One of the main disadvantages of profile-based targeting is that it can lead to an overemphasis on customer profiles instead of customer needs (Chernev, 2019). Customers within the same demographic, behavioral, and geographic profiles could have different needs. The company can fail to understand the needs of the customer, leading to the failure of companies to meet the specific customer needs. Another disadvantage with profile-based targeting is that it can lead to a poor understanding of its competitors. In case a company identifies that its target customers based on a specific geographic location, it can make a false assumption that its competitors are within the given location.

Conclusion 

Profile-based targeting is an approach to marketing that identifies customer characteristics. The analysis showed how Apple uses demographic factors to reach the young population. McDonald’s uses geographic factors to customize its menu for people in different countries, and Amazon uses behavioral factors to create a profile of customers browsing through the site. The study showed that profile-based targeting could create an effective and cost-effective approach to marketing. The recommendation is for companies to identify the best type of segmentation from one of the profile-based targeting approaches. The approach will help develop customer profiles, which can create an effective marketing strategy.

References 

An, J. (2020, October). Analysis on Marketing Segmentation of McDonald's. In  2020 The 4th International Conference on E-Business and Internet, 122-125. https://doi.org/10.1145/3436209.3436886 

Chernev, A. (2019). Strategic Marketing Management: The Framework . Cerebellum Press.

Kauffmann, E., Peral, J., Gil, D., Ferrández, A., Sellers, R., & Mora, H. (2020). A framework for big data analytics in commercial social networks: A case study on sentiment analysis and fake review detection for marketing decision-making.  Industrial Marketing Management ,  90 , 523-537. https://doi.org/10.1016/j.indmarman.2019.08.003 

Payne, B. (2017). Brand Positioning and its Usefulness for Brand Management: the Case of Apple Inc.  Newcastle business school student journal ,  1 (1), 51-57. http://novaojs.newcastle.edu.au/uonsbj/index.php/uonsbj/article/view/10