Published by: Nuru
Published date: 18 Mar 2022
Targeting the market:
A target market is a specific group of consumers to which a company aims its products and services. The market is a heterogeneous mix of customers; it is thus impossible to satisfy all sets of customers with one kind of marketing mix. They are hence segmented based on certain variables. Finally, the segment that best sits to the strength of the company is chosen. The better a company is at identifying its potential target market; the more successful it will be in delivering products and services.
Concept of target market:
Marketers should realize that the target market refers to the group of customers that are most likely to buy products and services from the company. When the company has a clear idea of its target market, it is easier to develop products and services that the people want.
Segment evaluation, Analysis, and Selection
The three tools available for evaluating the market segments are :
If the marketers are able to integrate all these tools properly, then they can select the desired market segments, which is called a target market.
Selection of Target Marketing (Types of Target market):
On the basis of market coverage a target market can be classified into three categories as follows:
Single-coverage market:
The company cannot survive if the target customers topped buying goods or diverted towards the next products because no alternative is available to the company in this coverage.
Limited-coverage market:
Product Specialization:
The company concentrates on making and distributing a particular product to a variety of customer groups i.e. single product for many markets.
Market Specialization:
The company concentrates on serving the needs of a particular customer group, i,e, many products for a single market.
Selective Specialization:
The company selects a few market segments, each of which is objectively attractive and matches the company's objectives and resources. It is also called multi-segment coverage. It has the advantage of diversifying the company's risks.
Full-coverage market:
The company attempts to select and serve all customer groups. It is a high sales strategy. There is greater penetration into each segment is combined with broad coverage of a total market.
Market Segmentation strategy:
There are four types of market segmentation strategies, they are listed below:
Differences between market aggregation strategy and market segregation strategy:
| Market aggregation | Market Segregation |
| Marketers attempt to satisfy several customers groups. | Marketers divide a mass market into small segments and serve one or a few segments. |
| A single marketing program may be sufficient to serve all customers. | Each market segments require separate marketing programs. |
| It is a production-oriented strategy. | It is a market-oriented or customer-oriented strategy. |
| The company enjoys advantages of its economics of scale in production as per unit cost becomes lower. | It lacks advantages of its economics of scale in production as per unit cost is comparatively high. |
| Mass channels and mass communication media are used. | Each segment may require separate specialized channels and communication media. |
| It requires minimum investment or expenditure on product modification, administrative expenses, inventory expenses, distribution, and promotion expenses. | It requires high investment or expenditure on product modification, administrative expenses, inventory expenses, distribution, and promotion. |
| The profit margin is low. | The profit margin is high. |
Concentrated marketing or market concentration strategy:
marketers attempt to concentrate on a homogenous segment, which can easily be defined and is profitable in nature. This strategy, market offer only a limited line of products since they try to establish a very strong image, maintain specialized knowledge and respond promptly to the needs of target customers. As such, it can achieve economics in production.
Multiple-Segment Strategy:
When marketers try to focus on two or a few more segments, that type of strategy is known as multi-segment strategy. Each market segment requires a separate marketing program. In this case, marketers preserve certain opportunities to shift easily from one market to another if one market segment declines in the market.