Executive summary

This report is based on “Market targeting and strategic positioning”. Choosing the right
market target strategy can affect the performance of the enterprise. The targeting
decision is critical to guiding the positioning strategy of a brand or company in the
market place. Moreover, locating the firm’s best match between its distinctive
capabilities and a market segment’s value requirements may require a detailed analysis
of several segments. Targeting decisions establish key guidelines for business and
marketing strategies. The market targeting options include a single segment, selective
segments or extensive segments. Choosing among these options involves consideration
of the stage of product market maturity, buyer diversity, product market structure and
the organization’s distinctive capabilities. Market targeting decisions need to take into
account the product market life cycle stage. Risk and uncertainty are high in the
emerging market stage because of the lack of experience in the new market. Targeting
in the growth stage benefits from prior experience, although competition is likely to be
more intense than in the emerging market stage. Targeting in mature stage often
involves multiple targeting. The positioning concept describes how management wants
buyers to position the brand, is based on targeted buyer’s value requirements.
Developing the positioning strategy requires integrating the product, value chain, price,
and promotion strategies to focus them on the market target. Building on an
understanding of the market target and the objectives to be accomplished by the
marketing program, positioning strategy matches the firm’s capabilities to buyer’s value
preferences. These programming decisions include selecting the amount of expenditure,
deciding how to allocate these resources to the marketing program components, and
making the most effective use of resources within each mix component. Positioning
analysis is useful in estimating the market response as well as in evaluating competition
and preferences. The analysis methods include customer/competition research, market
testing and positioning models. Analysis information, combined with management
judgment and experience are the basis for evaluating the positioning strategy.
Market targeting and strategic positioning

Introduction

Deciding which buyers in the market to target and how to position a company’s products
for each market target are core decisions of market driven strategy, guiding the entire
organization in its efforts to deliver superior value to customers. Effective targeting and
positioning strategies are critical in gaining and sustaining superior business
performance.

 Market targeting strategies

The market targeting decision identifies the people or organizations in a product market
toward which an organization directs its positioning strategy initiatives. Selecting one or
more promising market targets is a very demanding management challenge. Targeting
and positioning strategies consist of:

1. Identifying and analyzing the segments in a product market

2. Deciding which segment(s) to target
3. Designing and implementing a positioning strategy for each target

Targeting alternatives

The targeting decision determines which customer group(s) the organization will serve.
A specific marketing effort (positioning strategy) is directed toward each target that
management decides to serve. Market targeting approaches fall into two major
categories:

1. Segment targeting when segments are clearly defined &

2. Targeting based on product differentiation

Factors influencing targeting decisions

An important guide in targeting is determining the value requirements of the buyers in

each segment. Market segment analysis is essential in evaluating both potential and
existing market targets. Management needs to decide if it will target a single segment,
selectively target a few segments or target all or most of the segments in the product
market. Several factors may influence the choice of the targeting strategy;

 Stage of product market maturity

 Extent of diversity in buyer value requirements
 Industry structure
 The firm’s capabilities and resources
 Opportunities for gaining competitive advantage

 Targeting in different market environments

The product market environment is influenced by the extent of concentration of

completing firms, the stage of maturity and exposure to international competition. Four
life cycle stages illustrate the range of product market structures:

Emerging: Product markets which are newly formed are categorized as emerging.

Growing: These product markets are experiencing rapid growth.

Mature: These product markets are shifting from growth to maturity.

Decline: A declining product market is actually fading away instead of experiencing a

temporary decline or cyclical changes.
Emerging market

Knowledge about emerging market is very limited. The market is new and is relatively
small. The number of competitors initially consists of the first market entrant and one or
two others firms. Growth patterns are uncertain and the emerging market may
eventually disappear. There are two types of emerging markets:

1. A totally new product market &

2. A new product technology entering an existing product market.

Buyer diversity: The similarity of buyers’ preference in the emerging market often limits
segmentation efforts. It may be possible to identify a few broad segments.

Product market structure: New enterprises are more likely to enter a new market than
are large, well established companies. The exception is a major innovation in a large
company coupled with strong entry barriers.

References

 Marketing management by Philip Kotler.

 https://www.quickmba.com
 https://en.m.wikipedia.org
 https://www.smarinsights.com