Market Targeting

What is Market Targeting?

• Segmentation is just an initial stage.
• Market Targeting is the ultimate purpose.
• The selection of the specific market segment is known as Market Targeting.
• The company can target any number of segments.
• What should the company do to succeed in the all the chosen segments?
• What differentiation is required for the different segments?
• Can it make and deliver different offers for different segments?
• What different marketing strategies should it adopt to differentiate itself?
 Steps in Choosing the Target Market
• Evaluating the worth of each segment

• Check if it is better to select the whole market or only a few segments

• Look to segments which are less appreciated by the current offers

• Check if the firm has an advantage to serve that specific segment

• Check firm’s resources; marketing programs?

• Finally, choose a segment that is most appropriate for the firm

• Example: Bata – lower segment, Airtel Broadband – cherry picking
 Illustration of Market Targeting
• Example of bathing soaps
• Two segments in India
– Premium segment
– Popular segment

• Evaluation:

a. Is it sizeable? (Popular 80% and Premium 20%)

b. Is it growing? (Popular 10% and Premium 20% per annum)

c. Is it profitable? (Premium more margins)

d. Is it accessible? (Entry barriers, competitors)

e. Compatibility of firm’s resources and capabilities (Popular – high cost)
 Wrong targeting – COSTLY!!
• Some MNC’s was not successful because

a. Imperfect segmentation

b. Wrong assessment of size of market segment

c. Wrong selection of segments
Thank You