Market targeting, Marketing Management

Market targeting: market segmentation reveals the firm's market segment opportunities. The firm now has to evaluate the various segments and decide how many and which ones to target. We now look at how companies evaluate and select target segments. The target marketing process involves the following steps:

Step 1: evaluating market segments: in evaluating different market segments, a firm must look at three factors:

a.       Segment size and growth: estimating segment potential is essentially a forecasting task requiring one or more of the forecasting techniques. However, segmentation analysis requires predicting demand for the each component of a product market rather than for the product market as a whole. The profits of the various segments are needed to guide the forecasts. The sum of the estimates for each segment should be equal to the entire product.

b.      Segment structural attractiveness: company also needs to examine major structural factors that affect long run segment attractiveness. For example, a segment is less attractive if it already contains many strong and aggressive competitions. The existence of many actual or potential substitute products may limit prices and the profits that can be earned in a segment. The relative power or buyers also affects segment attractiveness. Buyers needs with strong bargaining power relative to sellers will try to force price down, demand more services, and set competitions against one another all at the expense of seller profitability, finally, a segment may be less attractive if it contains powerful supplies that can control prices or reduce the quality or quantity of ordered goods and services.

c.       Company objectives and resources: even if a segment has the right size and growth and is structurally attractive, the company must consider its own objectives and resources in relation to that segment. Some attractive segments could be dismissed quickly because they do not mesh with the company's long run objectives. Even if a segment fits the company's objectives, the company must consider whether it possesses the skills and resources it needs to succeed in that segment.

Step 2: selecting target market: after evaluating different segments, the company must now decide which and how many segments to serve. This is the problem of the target market selection. A target market consists of a set of the buyers who share common needs or characteristics that the company decides to serve.

Alternative segmentation strategies are:

1.       Limited coverage market targeting

2.       Full coverage market targeting

3.       Additional considerations coverage market targeting

   Limited coverage market targeting: when only one or few segments are selected as market targets it is called limited coverage market segmentation. This strategy requires fewer resources and therefore effective for small companies or in the introduction stage of a company trying to complete against the giants of the industry. Limited coverage market targeting can take any to the following forms:

Single segment concentration: company may select a single segment. Through concentrated marketing, the firm gains a strong knowledge of the segment's needs and achieves a strong presence. Furthermore, the firm enjoys operating economics through speculating its production, distribution, and the promotion. If it captures segment leadership the firm can return on its investment. 

Posted Date: 9/19/2012 4:32:18 AM | Location : United States







Related Discussions:- Market targeting, Assignment Help, Ask Question on Market targeting, Get Answer, Expert's Help, Market targeting Discussions

Write discussion on Market targeting
Your posts are moderated
Related Questions
What is Promotion Research in scope of Marketing Research? Promotion Research: Promotion research encompasses all attempts by the marketers to converse the company’s off

1. As the first to set up an international air express business in 1969, DHL had the first- mover advantage over other companies. Is being a first mover as advantageous for a servi

Marketing information system decision: it is the marketing information system the marketing information system necessary to understand why particular information is needed by any

Question 1: (a) What do you meant by total customer satisfaction? (b) How will customer safisfaction be measured? (c) Explain the importance of customer value creation

various approches of test marketing in FMCG

Publicity: publicity is a non -personal not paid stimulation of the demand of the product or services or business units by planning commercially significant news or editional comm

what would you suggest to avoid delays in despatch of products

What is Penetration Pricing Strategy? Penetration Pricing Strategy: Penetration strategy comprises low prices into an order to capture a huge share of the market/right th

Explain the term- Length of purchase decision time Length of time taken to reach a decision is much greater in organisation market. This means that intensity of any media pl

"A Product mix (also called product assortment) is the set of all product lines and items that a particular seller offers for the sale to buyers". An organization with the several