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Targeting Market Segment
A market consists of consumers of different characteristics and hence they have different needs and preferences. So,depending upon the various factors, organizations divide these consumers into smaller segments .This process of breaking the entire market into a series of smaller markets based on common characteristics related to consumer behavior is called market segmentation.
After segmentation process, marketers choose a specific segment or segments consisting of potential customers to launch its product. The basic objective is to attract the target market and boost its sales so that it has the maximum impact. This is called target market selection. In other words,it’s a process of deciding upon the market segment amongst the various segments.
It is very important for organizations to choose the correct target market for its products or services.This helps the marketers to understand its target consumers in a better way and develop various marketing strategies to generate maximum sales and revenues Thus targeting strategy involves segmenting the market, choosing appropriate segments and determining the products that will be offered in each segment to generate sales and revenues.
Basically, there are three targeting options:
* Differentiated marketing
* Undifferentiated marketing
* Concentrated marketing
Differentiated marketing is the strategy adopted my marketers in which they target more than one segment with its distinct and different products for each segment. So, in this strategy organizations plan and adopt different and unique marketing strategies to attract its potential customers in each segment and thus cater to their specific needs and demands.
This is also called multi segment marketing and is appropriate in cases where organizations are able to identify one or more market segments with their distinct needs for different types of products and consumers choose among well-known brands with distinctive images. It helps is greater market coverage and thus helps in attaining more sales volume as compared to others. It involves more expenditure.
Undifferentiated marketing is the strategy where the organization targets the entire market with one product. The basic objective is to attract maximum consumers and hence target them with a common marketing offering. It is effective in cases where maximum consumers have similar needs and is therefore called mass marketing. It is efficient due to economies of scale.
Concentrated marketing is the strategy usually adopted by smaller firms who do not have huge resources to cater all market segments and hence they usually offer one or more products to a single segment. So, the firm develops a product which caters to the needs of a particular segment and hence concentrates its marketing efforts for that particular segment.