Table of Contents
– Concept of Market Targeting
– Types of Target Market and Focusing Marketing Program
Concept of Market Targeting
Market targeting involves assessing or evaluating the goodness or badness, or effectiveness or ineffectiveness of the segments, and then selecting the appropriate market you wish to pursue. A target market refers to the group of buyers towards which a business has planned to aim its marketing efforts. Target marketing involves three activities: market segmentation, market targeting, and market positioning. Marketers must choose target markets in a socially responsible manner. Marketers must also monitor segment interrelationships, and seek economies of scope and the potential for marketing to super segments. Marketers should develop segment-by-segment invasion plans. Finally, market segment managers should be prepared to cooperate in the interest of overall company performance. The target market is the primary element of a marketing strategy. The focusing marketing programs of the target market are product, place, promotion, and price. These focusing programs determine the success of a product in the marketplace.
Types of Target Market and Focusing Marketing Program
I. Single-segment concentration
In a single segment concentration, an organization selects one segment and offers all its marketing efforts in that segment. The firms gain a strong knowledge of the segment’s needs and achieve a strong market presence through concentrated marketing. Furthermore, the firm enjoys operating economies through specializing in its production, distribution, and promotion. If it captures segment leadership, the firm can earn a high return on its investment. However, concentrated marketing involves risks. A particular market segment can turn sour because it is just like putting all eggs in a single basket.
2. Multi-segment coverage
In multi-segment coverage, an organization selects two or more market segments and offers a separate marketing mix for each segment at the same time. The firm selects a number of segments, each objectively attractive and appropriate. There may be little or no synergy among the segments, but each promises to be a moneymaker. This selective strategy has the advantage of diversifying the firm’s risk. It allows the organization to move its resources and efforts from less attractive segments to more attractive segments. However, it is a very high-cost strategy.
3. Product specialization
The firm makes a certain product that it sells to several segments. The marketing mix is modified to satisfy the needs of customers in various segments. An example would be a microscope manufacturer who sells to universities, the government, and commercial laboratories, and hospitals. The firm makes different microscopes for the different customer groups and builds a strong reputation in the specific product area. The product specialization helps the organization to specialize in one product area and develop reputation through experience. It diversifies risk and economizes cost by applying the same marketing mix for all markets. The downside risk is that the product may be supplanted by entirely new technology.
4. Market specialization
The firm concentrates on serving many needs of a particular customer group. In market specialization, an organization concentrates on one segment but serves many products to that segment. An example would be a firm that sells an assortment of products only to academic institutes. They provide or distribute all requirements of the academic institute. They sell them from stationeries to clothing require by the academic institutes. The firm gains a strong reputation in senrü)g this customer group and becomes a channel for additional products the customer group can use. The downside risk is that the customer group may suffer over-dependency on one segment.
5. Full market coverage
The firm attempts to serve all customer groups with all the products they might need. Only very large firms such as IBM (computer market), General Motors (vehicle market), and Coca-cola (drink market) can undertake a full market coverage strategy. Large firms can cover a whole market in two broad ways: through undifferentiated marketing or differentiated marketing. This strategy is downsides by the risk of inappropriateness to all organizations. The full market cannot be covered by all or small organizations. It is a high-cost strategy that can be followed by some multinational companies.
6. Niche marketing
Niche marketing is concentrating all marketing efforts on a small but specific and well-defined segment of the population. Niche markets do not exist, they need to be created by identifying needs, wants, and requirements that are being addressed poorly or not at all by other firms, and developing and delivering goods or services to satisfy them. The market niche is a more narrowly defined small market that has been ignored or neglected by large firms, whereas a market segment is a large identifiable group of buyers within a market. The market niche is the sub-segment derived from the market segment by understanding specific target markets whose needs have not been met by the existing products. Mayos Lite is an example of niche marketing. Generally, all noodles serve as an instant product to satisfy hunger but Mayos Lite sub-segmented the hungry market into diet conscious and figure conscious markets. As a strategy, niche marketing is aimed at being a big fish in a small pond instead of being a small fish in a big pond. It is also called micromarketing.