What are the benefits of targeting a market?

Answer 1

By targeting your market, you should get more sales for every dollar spent on advertising. In other words, you are not spending money on advertising that reaches people who are not your customers. Advertising costs are usually based on the number of people that see the ad - you pay more for a national TV commercial than you pay for a local or regional TV commercial because more people see the ad. So if your target is a specific geographical area, you would not but a national ad. Similarly, if your Demographics are heavily weighted to a particular age group or gender, you should get better results by placing an ad in a magazine that caters to that age and gender versus a general magazine or newspaper. Publications will provide you with the demographics of their readers (or viewers for TV, listeners for radio) and you would select a medium that matches your demographics. Demographics can be misleading, though. You have to study your customers to see if there really is a good correlation. For example, if you sell boats or boating supplies, your demographics might suggest that you should target to men of the ages 25 - 50, so perhaps ESPN sounds like a good match. However, if only 10% of the population buys boats, chances are you are still paying to reach 90% of your audience that will not be customers. In this case you would be better off buying a TV spot on a boating show or in a boating magazine. You might also target a marget where you are under-performing. Let's say you have a 20% market share everywhere except Chicago. You might examine your market in Chicago and tailor (target) an ad campaign that helps you perform better in Chicago.