In the Round table there a number of questions relating to target marketing.  I wanted to review the topic inan article to bring all the information together.  It is also covered in the MME Workbook.

At the base of understanding target marketing is the acronym S.T.P..  In our case it is not the high priced fuel additive. It stands for: Segment, Target, and Position, three tools to point the practice in the right direction. Simply stated:

Segmentation is dividing the community into meaningful and distinct markets of potential patients that merit a separate action plan.

Targeting is focusing on markets that could be attracted to the practice's specific services, and then develop plans tailored to meet their specific needs.

Positioning is designing the practice's environment so that it is attractive to the markets you are targeting.

Where to start? First determine which groups of potential patients to target. This is a critical point in marketing planning since all additional marketing decisions are going to be directed toward satisfying the markets selected.

 

What is a Market?

 

The simplest way to define a market is to think of it as consisting of all the potential patients that may have an interest in your procedures or services. In other words, a market comprises all patients (or potential patients) who have needs that may be fulfilled by the practice's offerings. A key factor for defining a market rests with the practice's ability to service the market. To a practice a market can only exist if the solutions sought by potential patients are ones that the practice can satisfy with their offerings.

Thus, a market is defined as a group of current or potential patients who are qualified to make purchases of procedures or services that a doctor is able to offer.

 

Selecting Target Markets Through Segmentation

 

This is where the "S" in STP comes in. The market selected by a practice as the target for their marketing efforts is critical since all subsequent marketing decisions will be directed toward satisfying the needs of these potential patients.

Because people are different and seek different ways to satisfy their needs, nearly all practices can use a market segmentation approach to target marketing. This approach divides broad markets, consisting of customers possessing different characteristics, into smaller market segments in which potential patients are grouped by characteristic shared by others in the segment.

To successfully target markets, using a segmentation approach, practices should engage in the following three-step process.

1. Identify segments within the overall market that are of interest to you
2. Choose the segment(s) that fits best with the practice's marketing objectives and goals
3. Develop a marketing strategy and tactics that appeal to the selected target market(s)

 

Step 1 - Identify Market Segments

 

The first step in targeting markets is to separate customers who make up large, general markets into smaller groupings based on selected characteristics or variables shared by those in the group. The purpose of segmentation is to look deeper within the general market in order to locate customers with more specific needs and who also share similar characteristics. Baby Boomers come to mind instantly. When grouped together these customers may form a smaller segment of the general market. By focusing market research on these smaller segments the marketer can learn a great deal about these customers and with this information can begin to craft highly targeted marketing campaigns.

Most often potential patients in your community can be easily identified through demographics (i.e., statistics that describe a population), geographics (i.e., location issues) and financial information. This information focuses mostly on easy to obtain data from such sources as government data (e.g., census information), examining secondary data sources (e.g., news media), trade associations and financial reporting services.

In the MME Resources area you will information on "List Companies" that can provide this data to you.

 

Step 2 - Choosing Market Segments

 

The second step in selecting target markets requires you to critically evaluate the segments you have identified in order to select those which are most attractive.

In determining whether a segment is worthy of being a target market for your practice, the doctor needs to address the following questions:

• Is the segment (group of potential patients) large enough to support your objectives? This is an especially critical question if the practice is entering a market served by many other practices.
• Is the segment showing signs of growth? One of the worst situations for a doctor is to enter a market whose growth is flat or declining, especially if other professional competitors already exist.
• Does the practice have the necessary skills, knowledge, equipment and expertise to service the segment? The doctor should understand and be able to communicate with the potential patients in the segment, otherwise they may face a significant learning curve in understanding how to effectively market to a segment.
• Does the segment meet the vision and/or mission of the doctor? The segment should not extend too far beyond the direction the doctor has chosen to take.

Once one or more segments have been identified the doctor must choose the most attractive option(s) for their marketing efforts. At this point the choice becomes the practice's target market(s).

 

Step 3 - Develop Marketing Strategy to Appeal to Target Market(s)

 

The results of analyzing market segments leads the doctor or marketing coordinator to consider one of the following target marketing strategies.

• Undifferentiated or Mass Marketing — Under this strategy the doctor attempts to appeal to one large market with a single marketing strategy. It is often referred to as the general or family practice approach.  This approach offers advantages in terms of lowering development and production costs, since primary "general dental services" are marketed. The rationale is that the doctor can satisfy a wide variety of needs and is willing to accept these patients.  It is often the tactic used by doctors opening scratch practices that are interested in building a patient base quickly.
• Differentiated or Segmentation Marketing — Doctors choosing this strategy try to appeal to multiple smaller markets of potential patients with a unique marketing strategy for each group. A dentist, for example, may offer his cosmetic services to one specific group and his implant services to another segment of the population.
• Concentrated or Niche Marketing —This strategy combines mass and segmentation marketing by using a single marketing strategy to appeal to one or more very small markets. It is primarily used by doctors who have identified sub-segments of a larger segment. In these situations practices can do quite well marketing to a single narrowly defined target market.  It is imperative in this technique to clearly establish yourself as an expert or leader in the selected category.
• Customized Marketing to a Referral Base — This target marketing strategy is used by many successful specialists. It attempts to appeal to targeted general or family practice doctors with their own individualized marketing programs. For referral marketing segmentation to be effective the marketer must, to some degree, allow referral doctors to "build-their-own" offerings using the specialist's services.

 

Positioning Products and Services

 

No matter which target marketing strategy is selected, the overall marketing strategy should involve the process of positioning practice's offerings in ways that will appeal to targeted potential patients.

Positioning is concerned with the perception potential and current patients hold regarding the doctor and his practice. In particular, it relates to marketing decisions a practice undertakes to get patients to think about them in a certain way compared to its competitors. The goal of positioning is to convince patients to believe the doctor's skills, services, and offerings are different in some importanr way from its competitors.

To "position" successfully the doctor must have thorough knowledge of the key benefits sought by the market segment. Obviously the more effort the doctor expends on segmentation the more likely they will know the benefits sought by those in the marketplace. Once known, the doctor must:

1. Tailor marketing efforts to ensure their offerings satisfy the most sought after benefits.
2. Communicate to the market in a way that differentiates the doctor's offerings from competitors.

Well, there you have it. I hope this article on "Target Marketing" satisfies your needs.