The Hindu Business Line : Expanding target segment the advertising way

Companies are aggressively adopting different strategies to increase user base to improve the sales and market share. Advertising has become an important tool in this.

Expanding the base of the target segment gives a whole new market to marketers, provided they get success in convincing the customers of the second-rung segment.

Get ready for sweet surprises as brands extend themselves to reach out to more consumers.

Jayshree Dubey

Don’t get surprised if one fine morning you see your grandma applying nail paint, lipstick or hair colour or grandpa fixing his dentures to eat chocolate. Companies are all set to give you such sweet surprises.

The application of the four Ps (product, price, promotion, and place) of marketing revolves mainly around the customers in the target segment. The target segment for any product is that homogeneous group of people which is purported to be the most pot ential customer for the product. The market follows the Pareto Principle, which says that 80 per cent of the sales comes from 20 per cent of the people. Thus, for any product, one of the major tasks of marketers is to identify the group of 20 per cent that gives 80 per cent revenue of that product’s sale to the company. No surprise then that major marketing efforts of companies attempt to attract the most potential group.

With the increase in number of customers, product moves up the product life cycle curve and reaches a maturity stage where further sales expansion comes to a halt. This is a challenging stage for a marketer when increase in promotional budget fails to give any remarkable increase in sales and validates the law of diminishing return.

At this stage, companies are left with three options to increase sales: increase in product usage (example: Cadbury chocolate as a gift pack and a substitute for sweets during festivals), increasing product users (adding new customers) and increasing product consumption (as in toothpaste marketers recommending that users brush teeth twice a day).

These days, many companies are aggressively pursuing various strategies of expanding their user base to improve the sales and market share. In this perspective, companies can be grouped into two categories: one which is trying to attract other segments to use their existing products which are performing well in their conventional, target markets; and the other, which are targeting more segments by line extension (launching new variants of existing market-performer products) to suit the need of customers in new segments. In this endeavour of targeting newer segments, advertising has become an all important tool.

The following examples of advertisements portraying the new avatar of India Inc emphasise how companies across the segments are banking upon these strategies:

The advertisements for chocolates show elderly people consuming chocolate in an attempt to sell these products to customer segments other than kids.

In a recent advertisement of Garnier hair colour, which is a lifestyle product mainly targeted at teenagers and young girls, a daughter advises her mother to try the product and thus makes an attempts to promote product among middle-aged women.

Public sector banks, being laggards in adopting technology to improve customer services, have failed to attract youngsters. Banks such as State Bank of India, Allahabad Bank and Bank of Baroda, which are not the choice of the high-flying, technology-savvy, young generation, are more popular among people above middle age. In a desperate attempt to drop their ‘pensioners’ bank’ image, they are trying to change their image by running advertisements where an unwilling youngster is pleasantly amazed to learn of all the services offered by his dad’s bank and instantly decides to go for it.

Roping in Shahid Kapoor and Shah Rukh Khan in the advertisement of Clinic Plus and Lux respectively was an attempt to target males for these products conventionally considered as women’s products for generations.

In the telecom sector, dadu in the advertisement of Tata Telecom has the onus of attracting customers from the rural segment.

In addition to promoting the product in new segments, line extension is another tool that is being used in a big way to expand the customer base. Sandoz, which has enjoyed quasi-monopoly for calcium tablets, has launched Calcium Sandoz women, by adding other ingredients necessary for women. To enter the male grooming segment which is expected to be Rs 800-1,100 crore, L’Oreal has launched Men Expert, promoting it through advertising in select magazines. After tasting success through its sugar-free gum, Orbit, claiming prevention of tooth decay by 40 per cent, Wrigley extended the brand and launched ‘Orbit White’ to target “bachelor men and bachelor women.” No research data is required to claim the positive role of advertising in popularising Orbit White.

Expanding the base of the target segment gives a whole new market to marketers, provided they are successful in convincing the customers of the second-rung segment. Companies need to be very strategic in presenting the product and its features to attract another segment, as just showing a grandparent eating chocolate may not convince other grandparents to eat chocolates. At the same time, companies need to be sensitive about the impact of targeting other segments on the existing target segment. It may be damaging, especially, if in a process of expanding its customer base, a premier brand is targeted at the aspiring middle-class also. In case of any signals of lowering demand with the existing target group, companies should adopt line extensions by bringing suitable changes in the products.

The writer is Assistant Professor, Institute of Public Enterprise, Osmania University Campus, Hyderabad.

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