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Target Marketing Using AI: Strategies and Benefits

  • Soumyaa Rawat
  • Jul 24, 2021
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“ There is only one winning strategy. It is to carefully define the target market and direct a superior offering to that target market. “ - Philip Kotler


Understanding about Target Marketing 


In a world where products and commodities define the nature of a market, marketing is all about promoting one’s product in the best possible way. 


While marketing involves promoting products to the customer base existing in the market base, target marketing is a phenomenon that refers to marketing a product or a group of products to the target customers (potential customers whose needs and desires resemble the product description). 


Simply put, the target marketing process aims to promote a product among the target audience and establish a customer base in the target market. 


As a part of the whole market, a target market becomes the focus point for strategizing product promotion and aiming at the target audience.


(Must read: Marketing analytics overview)


Why is it important?


Ever since markets emerged to be the centers for social activity and interaction, marketing has been largely through word of mouth. 


It was only later, especially when corporations began to establish that marketing became a strategic stunt for companies to sell their products to customers and persuade them to purchase them over and over again. 


Marketing is a way to promote your product and make your customers feel the need for it. Imagine trying to sell a product to everyone while putting out vague messages and unclear taglines. 


(Suggested read: Market Intelligence: Applications and Types)


Now, imagine putting out clear messages while intending to sell your product to a limited yet potential set of customers. Do you feel the difference? That is exactly what target marketing is all about. 


Unlike marketing that intends to sell off a product to everyone in the customer base, target marketing aims to focus on the target audience and generates awareness about the product among the target market. 


Here is a short case study based on one of the most popular OTT platforms - Netflix. 


“The target market for Netflix includes males and females between the ages of 17-60 and households with income levels of $30,000 and up. Netflix also appeals to different racial/ethnic groups with an assortment of foreign and international films. In terms of psychographics, Netflix targets 3 basic groups: people who are too busy to go out and shop for movies, people who are frequent renters and movie buffs, and people who want to get the most value for their money.”

Target Marketing - Netflix 


Now that we have clubbed technology and target marketing, let us now understand the relation between target marketing and artificial intelligence.


(Related blog: Netflix case study using digital marketing and data handling)



Target Marketing and AI


Artificial Intelligence encompasses a vast number of applications that we use in our day-to-day lives. From watching OTT media to drug discovery, AI is almost anywhere (AI applications)


A distinct yet unique field where AI is constantly progressing is target marketing. How? Let us unfold the mystery! 


Multiple studies and researches have established that marketing, in its traditional form, has proven to be ineffective and largely vague when it comes to finding target customers. 


Target marketing, a more advanced and precise form of marketing, has emerged to be quite effective in determining the target base of a particular product and then targeting the potential customers after all. 


As technology has joined hands with target marketing, the field has become more effective, efficient, and enormous. Unlike the past times when humans used to do the major work, machines have now stepped up to do the same work, just in a better way! 


Based on the studies collected from data science, Artificial Intelligence drives computers to draw predictive patterns, generate accurate advertising campaigns, and formulate responsive feedback mechanisms. 


An array of operations, ever since AI is working with target marketing, have evolved for the good. 


If we talk about the specific fields of AI that are working behind the curtains, we must consider discussing target marketing using Machine Learning and Natural Language Processing in AI. 


Target Marketing using different types of artificial intelligence techniques - NLP and ML  can be understood in light of various aspects of target marketing - advertising, customer feedback, and predictive results. 


(Also read - Developing AI and ML trends


  1. Natural Language Processing 


NLP is a field of AI wherein computers are trained enough to understand human language and interpret the meaning behind it. NLP combines linguistics, Machine Learning, and AI in order to process human language and work accordingly. 


(Must read - Top 10 Applications Natural Language Processing


A widespread technological superpower in our everyday lives, NLP defines the way advertisements are designed for the target market by understanding the needs and demands of the target audience. It also puts forth product promotion ideas and campaigns. 


Customer feedback, responsive mechanisms, and custom-made advertisements are ways through which NLP has made its way into target marketing. A number of trends like sentiment Analysis , content generation, and customer service have emerged to be helpful tools in combining target marketing and AI. 



  1. Machine learning


Another technique of AI that has made its way into target marketing is Machine Learning. Machine Learning algorithms aim to imitate human intelligence in computers and enable machines to act as humans do. 


(Also read - Recommendation Systems in Machine Learning)


In the case of target marketing, Machine Learning works on the lines of behavioral science and aims to automate the marketing process in a manner that is more effective and accurate. 


SEO Optimization is a budding field in this context as it relies on optimizing online content according to keywords and specific content that promotes a product accurately. 


A product of AI and target marketing, Digital Marketing has become an omnipresent sector of employment that is connecting professionals more than ever. 


A field wherein marketing personnel mold a product’s promotion in the digital form by accommodating optimized content and AI-driven patterns, digital marketing is the future of marketing in the years to come. 


“When it comes to the marketing world, the promise of machine learning is in quickly finding hidden patterns in massive amounts of consumer data. In fact, 97% of leaders believe that the future of marketing lies in digital marketers working with machine learning tools.” 

Target Marketing using ML  



Target Marketing Strategies using AI 


Target Marketing and its 3 topmost strategies have together generated success in promoting a good or service so far. These 3 target marketing strategies are known as STP and are popular for the precise impact they have on the target market. 


Since our point of discussion is AI, let us discover these strategies in relation to AI.


  1. Segmentation  


Target Market Segmentation is a marketing strategy wherein target audiences are divided into groups or ‘segmented’ into factions so that marketing becomes more efficient and effective. 


AI-driven segmentation is a much better and accurate way to divide target customers into groups by seeing them as more than a mere ‘target’. 



  1. Targeting


Once segmentation of the audience is done, AI-led machines target segmented groups of customers in order to reach out to them separately. 


Targeting involves creating separate advertisements and campaigning products in distinct ways to market a product or a service in a better way.



  1. Positioning 


The 3rd strategy of marketing - market positioning strategy involves the placing of one’s brand or product in the customers’ minds in order to persuade them to purchase your product. 


An AI-influenced positioning strategy is more oriented towards placing the brand identity in different ways so that all age groups (children, youth, adults, senior citizens) can relate to the product/service and get attached to it instantly. 


“Netflix’s algorithm decides which thumbnail photo to display in order to gain users attention and get them to click on that show.For example, if a user most often watches shows that feature a male lead, the thumbnails shown for each watching option will prominently show a male character. If a user is more drawn to shows/movies with animals in them, animals will be shown on the thumbnail.” AI Marketing 



Benefits of Target Marketing and AI 


As of now, you must have realized the significance of AI in target marketing. Just so you don’t miss out on the essence of AI in target marketing, here is a list of benefits of using AI in target marketing. 


  1. Accurate Product Suggestions


One of the biggest benefits of AI and target marketing is that customers get accurate product suggestions on the basis of product recommendation algorithms. E-commerce sites like Amazon and Flipkart are true testimonies of this benefit. 


By clubbing AI with target marketing, companies are now able to place their products more accurately in the audience’s minds. The moment you type ‘mobile phone’, a list of trending smartphones floods your screen and that is exactly what we are talking about. 


(Must read - Content-based Recommendation System in ML)  



  1. Increase in Product Sale


More than ever, AI is encouraging and promoting products and services in a way that is persuading the masses to purchase goods. 


Accurate recommendations, customer feedback, and responsive mechanisms, all have to do with this budding advantage that AI is providing to target marketing. 



  1. Loyal Customer Support


Lastly, AI is influencing the masses to stay loyal to their brands. Ever bought lipstick from Maybelline and saw your phone showing more Maybelline products? 


Well, AI, especially Deep Learning has benefitted companies from all around the world by keeping customers hooked to their favorite brands and updating them about new services/products as well. 


(Suggested read: Deep learning algorithms)



In the End 


In the end, target marketing and AI have a long way to go. In the years to come, AI is going to get broader and bigger as it will help target marketing become more customer-specific and accurate in terms of product promotion. 


From advertising to sales, AI has taken the field of target marketing multiple notches higher and will continue to do so. 


(Also read: Big data applications in marketing)


Unlike earlier when manual labor in the marketing sector was the sole determinant of the sale of goods, contemporary times have become well-equipped and effective with the coming of AI in target marketing. 

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