After identifying different market segments, marketers target different market segments or the whole market irrespective of segments. Market targeting indicates the selection of appropriate market segment and is made up of two main stages
Evaluation of different market segments
Market segments can be evaluated by the marketers based on different important parameters which are mainly
Select different market segments for targeting
After evaluating a particular market segment, marketers select a single or group of market segments to target for promoting and selling their own product. Marketers use some patterns of target market selection. The main 5 patterns for target market selection are
a) Single Segment Concentration
b) Selective Specialization
c) Product Specialization
d) Market Specialization
e) Full market specialization
Single Segment Concentration
In Single segment concentration, marketers select a single market segment to put more focus and concentration for that particular segment. Here the company modifies its product based on the needs of the particular market segment and tries to achieve superior market position in the segment. Company can earn higher profit if it becomes market leader in the segment as well.
There are some significant risks involved in the single market segment due to high concentration in only one market segment. Company can face high drop in sales if the market changes suddenly or some competitors launches a better product in the market.
Example would be: Apple iPhone in the high end smart phone segment.
Here the marketers select a certain number of market segments based on its range of products instead of focusing only in one market segment. All the segments should be able to generate profit for the company for being included in the target market segment list. Companies should have one product for each market segment.
More than one segment helps the companies to diversify the risk involved in only one market segment. If there is sudden loss in market share in one market segment, company can continue with the other market segments until it devices a new strategy to regain the market share.
Example would be different range of cars manufactured and marketed by General Motors in different countries.
Here the company produces and promotes one product in all the market segments or concentrates in one product category that it sells to several market segments. Companies should have very high economies of scale to depend on only one product.
Here risk is high as the total sells depends on only one product and any alternate product from competitors or slight drop in brand value can affect the profitability of the company.
Example would be Tata salt which the company sells in all the market segments.
Here the company or the marketer concentrates in only type of market segment through different products. All the products are designed to cater to only one particular customer group. In this case, the company specializes in that particular product category and builds a niche place for itself.
Example would be different baby products produced and marketed by Johnson & Johnson.
Full market specialization
In full market specialization, marketers target the whole market with its all products. This is mainly done by big companies with superior distribution system which has the capability to reach to all the customers in the market.
Example would be Pepsico which sells all of its products in cold drinks and snacks category to the whole market.
The whole market can be covered in two ways. In Differentiated Marketing, company operates in different segment with different set of products while in In-differentiated Marketing, Company target the whole market with only one product category.
After Market Targeting, Marketers decide about the market positioning strategies to create a distinct space for a product/brand in consumer’s mind.