Question

Why have companies moved away from mass marketing and toward target marketing?

Answer 1

First, let us being by understanding what we mean by target marketing and mass marketing-

Target Marketing is the type of marketing that tries to reach a specific, defined set of consumers or sometimes even individual consumers that are identified as potential consumers for a company, while Mass marketing tries to reach out to a large number of consumers at once.

Some of the drawbacks of mass marketing are actually solved using targeted marketing-

• Limited appeal - While mass marketing tries to reach a large number of consumers, not all consumers might be interested in the product/service. One size does not fit all.
  • Targeted marketing helps solve this being identifying a defined specific set of consumers with similar tastes, needs and wants. Hence, helping people find what they are looking for more easily. It also leads to a more engaged audience and more effective marketing.
• Limited flexibility - Given mass marketing tries to reach out to a larger audience, the message is often kept as broad as possible. This might result in the message losing what it was trying to convey in the first place.
  • Targeted marketing has very high flexibility and you can even carter to each individual separately.
• Lower efficiency of capital - Most companies have limited marketing budgets (capital). In mass marketing, while the message is intended for everybody, not everybody relates to it. As a result, the conversion rate is poor. This results in a lower bang for the buck and poor efficiency of capital. Also, mass marketing is generally more expensive.
  • Targeting marketing has a high efficiency of capital as every dollar spent reaches the intended consumer, leading to better conversion rates. Often you can reach the indented consumer is a lesser cost using targeted marketing.
• Difficult to measuring success- For example, it will be difficult to be certain about how many consumers saw the advertisement on hoarding and how many of them actually liked or disliked it.
  • Targeted marketing - it is easier to measure success with very specific/ pre-defined metrics.

However, it is important to note that even targeted marketing has certain drawbacks. It takes time and effort to define a specific set of consumers and classify them based on their specific needs and wants. Targeting marketing requires a lot of strategy and skill, for it to results in positive results.