Is this the end of target groups?

The good old target groups have finally run their course – they have nothing useful left to offer. The fact is that today’s consumers are fickle creatures with multiple personalities whose loyalty towards products and brands is waning by the day. The behaviour of these consumers is moulded by the desire to live out as many states of mind and moods as possible.

Accordingly, thinking in terms of these established target group categories tends to hinder the development of effective marketing and communications strategies. Although it still goes without saying that every product, every service and every medium has to have at least one target group, the fixation on target groups within a marketing context is mired in an outdated zeitgeist. This dates back to a time in which gender, age, marital status and income all had the same significance as specific purchase and consumption behaviour. In terms of consumption habits, there was a considerable difference between men and women in a certain age group, between those with and without families and between high-earners and low-earners.

Recent market research has shown that consumer behaviour has changed and that the definition of target groups based on socio-demographic characteristics is generally of little help in designing effective marketing strategies. These days, high-income consumers queue up with low-income consumers in discount supermarkets such as Aldi, older people are frequently as besotted with trendy products as their younger counterparts and women can frequently be seen buying male-oriented products.

Researchers reacted to this development by adding psychological characteristics to the socio-demographic concept in an attempt to save the time-honoured target group model. In this way, psychological factors are used to help determine target group profiles, yielding names such as “smart shoppers”, “milieus” or “style groups”.

However, even these approaches grind to a halt when they attempt to narrow down groups of buyers and non-buyers for highly specific products and media today. The profiles which are drawn up are frequently poor or of an overly general nature, with buyers and non-buyers evenly distributed among different milieus or style groups – or, for example, with the entire population belonging to the ‘smart shoppers’ category, given that 90 percent of consumers regularly shop at discount supermarkets.

But why is it so difficult to come up with target group profiles which describe and characterise buyer and user groups effectively? Current rheingold studies indicate the reasons for these difficulties – there are fewer and fewer constant behavioural patterns which are capable of characterising groups or individuals completely. Today’s somewhat “schizophrenic” consumers tend to develop a variety of behavioural patterns depending on the context in question. In doing so, men and women occasionally swap roles, lifestyle ideals hover between family life and independence, old people want to remain young at all costs whereas their grandchildren want to become established and reputable in the way that only older people used to be before.

Consumers want to be everything at the same time – young and old, single and attached, rich/famous and simple/normal. At the very least, they want to be sure that they will not be missing out on anything and that they can transform themselves whenever the need arises. In view of this, it is hardly advisable to look for behavioural patterns associated with groups and individuals as per the still-valid target group models.

This fact is particularly evident within the framework of the current youth research at rheingold: these days, young people adapt themselves so consistently to their respective environments that it is now scarcely possible to detect constant individual profiles. This adaptation and deindividualisation process moulds the everyday culture of young people today – any constants that can be detected in the behaviour of young people are not personal or individual, but rather non-personal and context-related. The decisive factor which determines their behaviour and the products and media which are used is the framework in which they are active: school, “hanging out” with friends, seventies parties, end of school balls, Saturday shopping, sports club, etc.

However, these non-personal basic patterns are not confined to the everyday routine of young people – we all behave in different ways depending on whether we are sitting at our desks, queuing up at the butcher’s or standing at the altar. These contexts determine our psychological moods and states of mind, they define our behaviour and our actions. Products and media are integrated in ‘mindsets’ such as these and are instrumental in developing them.

Accordingly, a far more simple and effective approach for marketing and communication is to base their strategies on these mindsets, rather than looking for increasingly fragmented target groups. Truly successful marketing does not hinge on the socio-demographic aspects of target groups, but rather on tailoring products and services for psychological mindsets and the images and attitudes which go with them. This being the case, mindset marketing can well be said to be the best way to reach the modern consumer.

Mindset marketing assesses the mood, the ‘state’ or the conditions experienced by consumers and business customers who come in ‘contact’ with certain products or services. These moods, conditions and states can be summed up in a single term: ‘mindset’. In this respect, the market is viewed as a psychological force field. If an individual (customer, consumer) enters this field, he/she will be subject to these conditions and forces. This knowledge can be used to intervene, control and change – that is mindset marketing.

The mindset marketing model sees consumer behaviour in a wholly different light than that of traditional target group models, an approach which has led to a series of stimulating findings. For instance, situations where the same consumer uses a number of different chocolate products at the same time no longer appear to be chaotic or absurd. It is generally the case that the different products cater for different mindsets and the consumption motives which are associated with them. On a psychological level, a bar of pure chocolate such as Milka or Cadbury’s Flake “satisfies” different frames of mind than other pure chocolate bars such as Ritter Sport or Yorkie, which, in many respects, actually have more in common with high-energy, chocolate-based confectionery such as Mars and Snickers. In view of this, both brands are seen far less as direct competitors than might be suggested by a market perception oriented solely towards product categories and their target groups.

To take another example, sparkling mineral water generally caters for very different states of mind than still mineral water. The still variant can be consumed in many different situations and used to prevent a thirst from developing in the first place. The consumption state of mind is characterised by constant drinking and what might be termed a “permanent freedom from thirst”. With sparkling water, on the other hand, there is a far greater focus on the drinking experience itself and the enjoyment aspect which is involved. Even though parallel use is less common than among chocolate products, there are many households and consumers who use both types and who wish to live out both states of mind.

Mindset marketing does not focus on the person or target group, but rather on the consumption experience and the specific purchase and acquisition situation. In this way, the concept offers added insight to the actual competitors, who are frequently positioned outside the supposed user target group for a specific product area. All of a sudden, Mars bars find themselves in direct competition with Bifi salami snacks or fresh sandwiches from the delicatessen. Or the purchase of a new car is in direct competition with plans for holidays or home improvement.

Can the mindset concept still be said to make sense when dealing with larger and long-term purchases? After all, “major” investments such as cars, houses and endowment insurance are not just pursued with a view to “living out” certain states of mind. However, on close examination, the demands inherent in these states of mind have also penetrated these products. These days, cars are designed as multi-purpose or multi-utility vehicles so that they are ideal for all types of different situations. Today’s motorists want a car which will allow them to live out as many different states of mind as possible – an off-road vehicle which is suitable for families, which has the driving characteristics of a sports car and which can reach speeds of 250 km/h on the motorway.

Ideally, insurance products would also be designed to be as flexible as possible – this is in order to cover all of life’s vicissitudes as well as to allow modifications with regard to rates, contributions and risks. Only then are policy holders happy. The same goes for building and furnishing houses and apartments, where demands for quick conversion and alterations are steadily growing in importance, to the extent that these are already taken into account at the planning stage. Mobile walls, units and furniture are held in very high esteem. The design of the property in question should allow for all the “frames of mind” which a person might have with regard to his/her own four walls.

States of mind fit into the routine of daily life. Whereas alcoholic drinks are generally called on to enhance evening states of mind, cereals are usually found in early-morning scenarios etc. The same can also be said of media offerings – for instance, studies conducted for the German music television station Viva indicated the most suitable programme formats for the different timeslots throughout the day.

At present, the potential of the mindset marketing concept has not yet been exhausted, and its limitations still have to be explored in full. It is a model which offers enticing perspectives for highly tangible marketing activities.

© 2015 rheingold