Market targeting

Deciding which buyers in the market to target and how to position a company's products for
each market target and quote 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.
When these decisions are faulty, they weaken business and marketing performance.

market targeting strategy

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. Example:
Should the organization attempt to serve all buyers who are willing and able to buy a
particular good or service or instead selectively focus on one or mode subgroups.

Targeting alternatives: The targeting decision determines which customer groups the
organization will serve. Is specific marketing effort is directed toward each target the
management decides to serve.
Market targeting approaches fall into two major categories:
i. Segment targeting when segments are clearly defined
ii. Targeting based on product differentiation.

Factors influencing targeting decisions: Market segment analysis help us to evaluate and
link the relative attractiveness of the segments under consideration as market targets.
These evaluations include customer information, competitor’s strength and positioning, and
the financial and market attractiveness of the segments. An important matter in targeting is
determining the value requirements of the buyers in each segment. market segment
analysis is essential in evaluating both existing and potential market targets.

Management needs to decide if it will target a single segment, selectively target a few
segments odd target all most of the segments in the product markets. several factors may
influence the choice of targeting strategy:
i. Stage of product market maturity
ii. Extent of diversity in buyer value requirements
iii. Industry structure
iv. The firm's capabilities and resources
v. Opportunities for gaining competitive advantage

Targeting in different market environments:

The product market environment is influenced by the extent of concentration of competing
firms, the estate of maturity and exposure to international competition. four lifecycle stages
illustrate the range of product market structures:

1. Emerging: product markets that are newly found are categorized as emerging and
are created by factors such as a new technology, the changing needs of buyers, and
 the identification of unmet needs by suppliers. The Segway battery powered one-
person scootered targets commercial users such as Postal carriers.
2. Growing: This product markets are experiencing rapid growth. flat panel TV's add in
an advanced stage of growth, accounting for worldwide sales in 2006 of 44 million
units out of a total of 185 million TV's. Competition consists of several firms and one
or more maybe gaining a leading market position.
3. Mature: These product markets are shifting from growth to maturity, as indicated by
the product lifecycles of the products. Growing rapidly until reaching high levels of
household penetration, microwave ovens are now in the majority stage.
4. Declining: A declining product market is actually fading away instead of expensing a
temporary decline or cyclical changes. Fax machines are rapidly declining as Internet
technology and email dominate the product market.

The food product market stages of evolution are neither exhaustive not mutually exclusive.
Moreover, changing environmental and industry conditions may alter a product market
classification. Also, rapid growth may occur in some countries while growth is mature or
declining in other countries or regions.
The four different market environments discussed above are closely related to the product
lifecycle stages. Looking at competition during the stages of the product lifecycle and at
different product market levels provides insights into different types and intense sites of
competitions. We know that products like people, move through life cycles and products
lifecycles are increasingly shorter due to the rapid pace of technological change in the 21st
century.

1. Emerging markets: Knowledge about an emerging market is very limited. the market
is new and it's relatively small. The number of competitors initially consists of the 1st
market in entrant and one or two other firms. determining the future scope and
direction of growth of the product market development may be difficult, as well
forecasting the size of the market growth. there are two types of emerging markets.
one is a totally new product market, another is a new product technology entering
an existing product market.
i. Buyer diversity: The similarity of buyer’s preferences in the emerging market
often limits segmentation efforts. it may be possible to identify a few broad
segments. if segmentation is not feasible, an alternative is to define and describe
an average or typical user, directing marketing efforts towards these potential
buyers.
ii. Product market structure: New enterprises are more likely to enter a new
product market than are large, well established companies. That exception is a
major innovation in a large company coupled with entry barriers. The Pioneers
developing a new product market are typically small new organizations set up
specifically to exploit first mover advantages in the new resource space. This
intrapreneurs often have limited resources and must pursue product market
opportunities that require low levels of investment.
iii. Capabilities and resources: If I'm entering an existing product market with a new
product is more likely to achieve a competitive edge by offering buyers unique
benefits rather than lower prices for equivalent benefits. Through cost maybe
 the basis of superior value when the new product is a lower cost alternate
technology to an existing product.
iv. Targeting strategy: Targeting in an emerging market is likely to focus on a
preference or use situation that corresponds to the value proposition offered by
the new product. The targeting decision will depend in part order whether 2A
totally new product market or new product technology is involved. Targeting in
the former situation is likely to focus on an average or typical user. Targeting for
a new technology in an existing market may require trying to link the value
offered by the technology to buy are expected to benefit most from value
offered. Market entry experimentation may be needed to refine the targeting
strategy.

2. Growth markets: Segments are likely to be found in the growth stage of the market.
identifying customer groups with similar value requirements improves targeting and
experience with the product, process and materials technologies leads to greater
efficiency and increased standardization. During the growth stage the market
environment moves from highly uncertain to moderately uncertain.
i. Product-market structure: We often assume that high growth markets are
very attractive and that early entry offers important competitive advantages.
Existing companies are likely to enter new product markets at the growth
stage. they have the resources to support market entry and if there is a good
capabilities or customer value requirements match and the growth market
offers high potential, entry is likely.
ii. Capabilities and resources: The firms competing in growth markets are likely
to follow one of these strategies.
a. Pursuit of a market leadership strategy
b. Follow very selective targeting and positioning strategies
Eastman Kodak is following the leadership strategy in the digital photographic market, why
does Pentax is using a more focused strategy.
iii. Targeting strategy: There are at least three possible targeting strategies in
the growth markets
a. Extensive market coverage by firms with established businesses in related
markets
b. Selective targeting by firms with diversified product portfolios
c. Very focused targeting strategies by small organizations serving one or a
few market segments
A selective targeting strategy is feasible when buyers needs are differentiated or when
products are differentiated. the segments that are not served by large competitors provide
an opportunity for a small firm to gain competitive advantage.
3. Mature Markets: Not all the firms that enter the emerging and growth stages of the
market survive in the maturity stage. The needs and characteristics of buyers also
change overtime.
i. Buyer Diversity: Segmentation is often essential at the maturity stage of the
life cycle. the product market is clearly defined indicating buyers’ preferences
and competitive structure. The factors that drive market growth are
recognized, and market is not likely to expand or decline rapidly.
 Nonetheless, eventually decline may occur unless actions are taken to extend
the product lifecycle through product innovations.
ii. Product market structure: Metro product markets typically experience
intense competition for market share, emphasis on cost reduction,
continuing needs for new products, international competition, tight profit
margins end increases in the role and importance of value chain strategies.
Deciding, how to compete successfully in a measured product market is a
demanding challenge here. Moreover, the typical mature industry structure
consists of a few companies that dominate the industry and several other
firms that pursue market selectively strategies. The larger firms may include a
market leader and two or three competitors with relatively large market
positions compared to the remaining competitors.
iii. Capabilities and resources: Depending on the firm's position in the major
market, management's objective may be cost reduction, selective targeting
or product differentiation. Poor performance may lead two restructuring the
Corporation to try to improve financial performance. If improvement is not
feasible, the decision may be exit from the business
iv. Targeting: Both targeting and positioning strategies may change in moving
from the growth to maturity stages of the product market. Targeting maybe
altered to reflect changes in priorities among market targets. Positioning
within a targeted market may be adjusted to improve customer satisfaction
and operating performance. The detailer Best Buy implemented an
interesting micro segmentation targeting strategy, focusing on customer
groups patronizing it's nearly 1000 individual stores in combination with
national targeting.
4. Global markets: Understanding global market is important regardless of where an
organization decides to compete, since domestic markets often attract international
competitors. In selecting strategies for global markets, there are two primary options
for consideration.
a. The advantages of the global integration
b. The advantages of local responsiveness

i. Global integration: this strategy considers the extent to which standardized

products and other strategy elements can be designed to compete on a
global basis. the world is the market arena and buyers are targeted without
regard to national boundaries and regional preferences. The objective is to
identify market segments that span global markets and to serve these
opportunities with global positioning strategies.
ii. Local responsiveness: While local responsiveness is a relevant issue, the
central consideration is how to segment global markets. Increasingly the
basis for global segmentation is not by country. Instead, other segmentation
variables are often more important. Examples include climate, language
group, media habits and income.
iii. Targeting: Strategies for competing in international markets range from
targeting a single country, regional targeting, or targeting on a global basis.
The strategic issue is deciding whether to compete internationally and if so
 how to compete. It also instructs us the choice of a domestic focus requires
an understanding of the relevant global influences on the domestic strategy

Positioning strategy
Positioning may focus on an intercompany, a mix of products, a specific line of products or a
particular brand, although positioning is often centered on the brand. Positioning initiatives
are closely linked to business strategy because strategic positioning comprises the efforts of
the business to deliver superior value to its customers.

strategic positioning initiatives:

i. Positioning concept: how management wants buyers in the market target to
Position the product or brand
ii. Positioning strategy: the combination of marketing actions used to communicate
the positioning concept to targeted buyers
iii. Positioning effectiveness: how will management's positioning objectives are
achieved for the market targets

The positioning concept indicates management's desired positioning of the product in the
eyes and minds of the targeted buyers. It is a statement of what the product means guided
by the value requirements of the buyers in the market target. Positioning is intended to
deliver the value requirements appropriate for each market target pursuit by the
organization.
The positioning strategy is the combination of marketing program strategies used to portray
the positioning desired by management to the targeted buyers. This strategy includes the
product, supporting services, distribution channels, price and promotion actions taken by
the organization.

Selecting the positioning concept

The positioning concept indicates how management wants buyers to perceive the
company's brand. Choosing the positioning concept is an important first step in designing
the positioning strategy. the positioning concept of the brand is “the general meeting that is
understood by customers in terms of its relevance to their needs and preferences”.

1. positioning concepts: the positioning concept should be linked to buyer’s value

requirements. the focus of the concept maybe functional, symbolic or experiential. if
functional concept applies two products that solve consumption related problems
for externally generated consumption needs. three aspects of positioning concept
selection are important.
i. The positioning concept applies to a specific brand rather than all of the
competing bands in a product classification such as toothpaste
ii. Back concept is used to guide positioning decisions over the life of the band,
recognizing that the brands specific position may change overtime. However,
the consistency overtime is important.
iii. If two or more positioning concepts for example, functional and experiential,
add used to guide positioning strategy, the multiple concepts are likely to
confuse buyers and perhaps weaken the effectiveness of positioning actions.
 2. Positioning Decision: In deciding how to position a brand, it is useful to study the
positioning of competing bands using attributes that are important to existing and
potential buyers of the competing bands. the objective is to try to determine the
preferred position of the actual positions of competing bands.

Developing the positioning Strategy: The positioning strategy integrates the marketing
program components into a coordinated set of initiatives designed to achieve the firms
positioning objective. Developing the positioning strategy includes determining the activities
and results for which each marketing program component will be responsible, choosing the
amount to spend on each program component and deciding how much to spend on the
entire program.

Marketing program decisions: Nokia corporation's positioning strategy illustrates how the
Finland based global cellular phone producer combines its marketing mix components into a
coordinated strategy.

1. Product strategy: Nokia develops and produces infrastructure equipment and

systems for wireless and fixed networks. it has an active new product development
program designed to Excel over competition. Nokia is emphasizing radio technology
and mobile phone software in R&D efforts.
2. Value chain strategy: Nokia managers the value chain from supplier to end users,
integrating it’s global supply network with phone company partners. The network is
very efficient although complex due to the numerous components that are part of
each cell phone.
3. pricing strategy: Nokia pricing strategy was rigid in the early 2000s but became more
flexible as intense competition developed. the company's market share dropped
from 35% which it held for several years to a low of 29% in 2004. it has since
regained market share through innovative products and competitive prices
4. promotion strategy: nokia's two important customers. one is end users of cell
phones and another is service providers. the company made some mistakes with
providers who wanted their phones to be identified as a provider brand. Nokia
resisted while smaller competitors responded to gain market share.
5. Competitive advantage: nokia's management made some mistakes and responded
too slowly with change initiatives after gaining feedback from the marketplace.
offering an innovative array of fashionable and functional cell phones is a continuing
challenge. most impressive are the firms skills in managing a global value chain
network. its positioning strategy for each market target will be an important
competitive advantage that management must continuing to strengthen and adapt
in the complex and dynamic market and competitive space.