Patterns of Target Market Selection

Market Segmentation

1. Market Selection Dr. Pooja Assistant Professor Dept. of Commerce AMPGC, BHU Market Targeting Patterns of Target Market Selection

2. Market Targeting It is essential for the organizations or marketers to identify the set of people whom they want to target?. Marketers must understand the needs and expectations of the individuals to create its target market. The target audience must have similar needs, interests and expectations. Similar products and brands should entice the individuals comprising the target market. Same taglines and advertisements attract the attention of the target audience and prompt them to buy.

3. How to select the Target Market? To select a target market, it is essential for the organizations to study the following factors: Understand the lifestyle of the consumers Age group of the individuals Income of the consumers Spending capacity of the consumers Education and Profession of the people Gender Mentality and thought process of the consumers Social Status Kind of environment in which individuals are exposed

4. Patterns of Target Market Selection The process of manipulating the marketing mix in terms of differentiating products, methods of communication and other marketing variables is known as market targeting or target marketing. Market targeting should not be confused as synonymous to market segmentation. Through segmentation, a firm divides the market into many segments. But all of them need not form the target market. The target market signifies only those segments that it wants to adopt as its markets. Thus the target markets are selected out of the segments formed. In evaluating market segments, any company must look at 2 factors: 1. The segment’s overall structural attractiveness in terms of size, growth, profitability, scale economics and low risk 2. Company’s objectives and resources

5. Selecting the Market Segments Once a marketer has evaluated the different segments for their size, growth, and attractiveness, and found that they are compatible with the company’s objectives and resources, the obvious step is to go far selecting the market segments. There are five patterns of target market selection, which was first put forward by D F Abell .

6. 1. Single Segment Concentration In this case, the marketer prefers to go for single segment. In our hypothetical example, the company X uses this strategy when it produces a typical product for a single type of market like plasma TV. In real life, companies like Allahabad Law Agency (only law books) and BPB publications (only Computer books) are good examples. The company may adopt this strategy if it has strong market position, greater knowledge about segment-specific-needs, specified reputation and probable leadership position.

7. 2. Selective Segment Specialisation This is known as multistage coverage because different segments are sought to be captured by the company. The company selects a number of segments each of which is attractive, potential and appropriate. There may be little or no synergy among the segments, but this strategy has the advantage of diversifying the firm’s risk. In example, if the company X produces plasma TV as well as Walkman, the two different types of products obviously for two different types of markets, then it can be cited as an example of Selective Segment Specialisation strategy. Bata shoes were mostly in the popular segment until beginning of 1990s. Then, it turned itself into premium segment while still retaining the appeal of popular segment. The taking of select segments of shoe market could not help Bata to gain full control of market. After 1995, it has come back again to the popular segment .

8. 3. Market Specialisation Here the company takes up a particular market segment for supplying all relevant products to the target group. In our example, the company X can implement Market Specialisation strategy by producing all sorts of home appliances like TV, washing machine, refrigerator and micro oven for middle class people. Here the chosen segment is the middle class and the firm specializes in that market only. Upkar Publications Pvt. Ltd. publishes and sells books for the students and job-hunters that include competition books (CAT, IIT-JEE, IAS), general knowledge books and personality development books.

9. 4. Product Specialisation Product specialisation occurs when a company sells certain products to several different types of potential customers. In our example, if the company X produces only a particular type of gizmo like toaster that is consumed by all type of people, they we can say that the company uses Product Specialisation strategy. Product specialisation promises strong recognition of customer within the product areas. Super Precision Components supply small nuts and screws for use in military, industry and daily use.

10. 5. Full Coverage The company attempts to serve all customer groups with all the products they might need. Only very large firms can undertake a full market coverage strategy that can be done in 2 ways: i. Undifferentiated marketing or convergence: The company ignores market segment differences and goes after the whole market with one market offer. It focuses on a basic buyer need rather than on differences among buyers .   ii. Differentiated marketing or divergence: The company operates in several market segments and designs different programmes for each segment. It creates more total sales than the former. But the following costs would be higher: a) Product modification cost b) Manufacturing cost c) Administrative cost d) Inventory cost e) Promotion cost