TARGETING

Market targeting is a process of selecting the target market from the entire market. Target market
consists of group of buyers to whom the company wants to satisfy or for whom product is
manufactured, price is set, promotion efforts are made, and distribution network is prepared. A
company cannot concentrate on all the segments of the market. The company can satisfy only
limited segments. The segments the company wants to serve are called the target market, and the
process of selecting the target market is referred as market targeting.
“Market is segmented on certain bases, like income, education & age. A few segments are selected
to serve them. Thus, evaluating & selecting some market segments can be said as targeting.”
“Market targeting consists of dividing the total market into segments, evaluating these segments,
and selecting the appropriate segments as the target market.”
Procedure of Market Targeting: Market targeting procedure consists of two steps:
1. Evaluating Market Segments: Evaluation of market segments calls for measuring suitability of
segments. The segments are evaluated with certain relevant criteria to determine their feasibility.
To determine overall attractiveness/suitability of the segment, two factors are used:
a) Attractiveness of Segment: In order to determine attractiveness, the company must think on
characteristics which reflect its attractiveness, such as size, profitability, measurability,
accessibility, actionable, potential for growth, scale of economy, differentiability, etc. These
characteristics help decide whether the segment is attractive.
b) Objectives and Resources of Company: The firm must consider whether the segment suit the
marketing objectives. The firm must consider its resource capacity. The material, technological
& human resources are taken. The segment must be within resource capacity of the firm.
2. Selecting Market Segments: When the evaluation of segments is over, the company has to
decide in which market segments to enter. That is, the company decides on which and how
many segments to enter. This task is related with selecting the target market. Target market
consists of various groups of buyers to whom company wants to sell the product; each tends to
be similar in needs or characteristics.
Alternative Strategies (Methods) for Market Targeting:
1. Single Segment Concentration: The Company selects only a single segment as target market &
offers a single product. Here, product is one; segment is one. Example, a company may select
only higher income segment to serve from various segments based on income, such as poor,
middle & elite class. All the products produced by the company for a single segment.
2. Selective Specialization: In this option, the company selects a number of segments. A company
selects several segments and sells different products to each of the segments. All such segments
are attractive & appropriate with firm’s objectives & resources. Every segment is capable to
promise the profits. This multi-segment coverage strategy has the advantage of diversifying the
firm’s risk. Firm can earn money from other segments if one or two segments seem unattractive.
3. Product Specialization: A company makes a specific product, which can be sold to several
segments. Here, product is one, but segments are many. Company offers different models &
varieties to meet needs of different segments. The benefit is that the company can build a strong
reputation in the specific area. Many ready-made garment companies prefer this strategy.
4. Market Specialization: This strategy consists of serving many needs of a particular segment.
Here, products are many but the segment is one. The firm can gain a strong reputation by
specializing in serving the specific segment. Company provides all new products that the group
can feasibly use. But, reduced size of market, reduced purchase capacity of the segment, or the
entry of competitors with superior products range may affect the company’s position.
5. Full Market Coverage: In this strategy, a company attempts to serve all the customer groups
with all the products they need. Here, all the needs of all the segments are served. Only very
large firm with overall capacity can undertake a full market coverage strategy.

Methods of Full Market Coverage:

A) Undifferentiated Marketing: A company does not consider market segment differences and
approaches the whole market with one offer. The offer concentrates on what is common in the
needs of consumers, ignoring what is different. The company develops a product and a
marketing program that appeal to the majority of the buyers. It depends on mass distribution
and mass advertising. Example: Here a company develops a product that is suitable for almost
 the whole market. But the product has some distinct quality (flavor, color, size, warranty) that
puts the product in a unique place in customers’ minds. Toothpaste is the best example. You
can use any toothpaste. The whole market uses toothpaste. There are few exceptions where
companies produce toothpaste for kids (which require heavy marketing to sell) or specialized
medicinal toothpaste for dental problems (which people only buy if a doctor prescribes them).
B) Differentiated Marketing: Adopting a differentiated marketing strategy, a company targets
several market segments and approaches each segment with separate offers. Nike refreshes
athletic shoes for a dozen or more different sports, from running, fencing, and aerobics to
bicycling and baseball. It expects that product and marketing variations will fetch higher sales
and secure a stronger position within each market segment. The company thinks that a stronger
position in several segments will reinforce consumers’ overall identification with the product
category. Differentiated marketing leads to increasing costs. Product modification to meet
the needs of different market segments calls for additional research and development,
engineering, or special tooling costs resulting in an overall increase in costs. Individualizing
marketing plans to the needs of separate segments calls for extra marketing research,
forecasting, sales analysis, promotion planning, and channel management – all contributing to
an increase in costs. Example of differentiated marketing: e-commerce websites giving free
delivery to a certain area where the competition can’t Cellular service providers are promoting
that they have the best mobile data rates, or they have the best 4G/5G network in your area.
C) Concentrated Marketing: Concentrated marketing is especially effective when a company has
resource constraints. Instead of choosing a small share of a large market, the company chooses
a large share of one or a few submarkets. Recycled paper products concentrate on the market
for alternative greeting cards. Natural Sodas concentrates on a narrow segment of the soft-drink
market. Small new businesses can place themselves against larger and stronger competitors by
using concentrated marketing. Concentrated marketing offers certain benefits. As the company
becomes aware of the segments’ needs and acquires a special reputation, it achieves a strong
market position. Concentrated marketing provides many operating economies resulting from
specialization in production, distribution, and promotion. A well-chosen segment served with
concentrated marketing ensures a high rate of return on the company’s investment.
Concentrated marketing has a problem of greater than normal risks. Companies with limited
resources will usually target just one or a few sub-markets. If a segment is successfully chosen,
there is a possibility that the firm may earn a high rate of return on its investment.