Compiling a targeting strategy for a home remodeling company requires dividing the potential market into segments based on commonalities, selecting the segments with the best sales prospects and devising the most appropriate product and methods with which to approach each target segment. Statistics from market research organizations can provide you with the number of people who fall into each of the categories you identify.
Segmenting the Market
Segmentation involves identifying the group or groups of prospective customers that are most likely to need home remodeling services. This enables you to create a targeted, strategic marketing program. Visualize your company’s ideal customer, based on identifying demographic factors such as age group, income, marital status and home ownership. For example, students renting their first studio apartment are unlikely to need home remodeling, so segmentation should eliminate them as a group. Break the larger segments up into subsets based on specific needs.
Choosing a Segment
Your choice of one or more groups or segments determines the type of marketing, media and channels to use to target them. For example, a possible segment to target for home remodeling could be homeowners in the age group of 28 to 45, earning a salary of $50,000 per year from full-time employment, who live within a radius of 50 miles from your company base. A subset of this group may be those who have teenage children or aging parents, as their home remodeling needs could include creating rooms with separate entrances or fitting out bathrooms for additional support.
The home remodeling company can choose which targeting strategy to follow, based on the resources available and the types of work in which it specializes. The single-segment targeting strategy concentrates on one market segment and targets it with one marketing approach. This may be suitable for small businesses with limited resources. In a multisegment strategy, the company targets different segments with the same product, using different marketing approaches tailored to appeal to the needs of each segment. A product specialization targeting strategy customizes the product for different market segments, while a market specialization strategy targets a single market segment with a variety of products.
In a concentrated or single-segment targeting strategy for a home remodeling company, the company could choose to target only homeowners with a need for a separate entrance for teenage children. Social media would be used to reach the teens, while direct mailings would promote the benefits and the investment potential of the separate entrance model to the parents. In a multisegment strategy, the company also could target homeowners with aging parents, with advertising promoting a different message. Channels could include the same direct mail offers, as well as daytime television talk shows that elderly parents might bring to the attention of the homeowner.