Lecture Market Targeting

Market Targeting

Market Targeting • Market Targeting: Process of evaluating each market segment’s attractiveness and selecting one or more of the market segments to enter

Evaluating the market segments • • • • •

. Factors: * segment size and growth * segment structural attractiveness * company objectives * resources

Evaluating the market segments • Consumers – Size – Growth potential

• Competitive situation – Nature of competition – Substitutes – Power of suppliers and buyers

• Company – objectives – resources

Selecting the market segment

Selecting the marketing segment • Single segment concentration - firm concentrates on one market only for its one product.the firm get strong market knowledge of the segment need and achieve strong market position.and strong in production distribution and promotion. • It involve higher risk because consumer can easily switch over to another product.for that company prefer to operate more than one segment.

• Selective specialization - firm selects a number of attractive and appropriate segments and develops products that appeal to each segment • There may be little or no synergy among product but all are money maker. • The risk minimize. • If one segment is unattractive firm can get money from other segments.

• Product specialization - firm focus is on a product it can sell to several segments. • Through Product specialization strategy the firm build the strong reputation in the specific product area.

• Market specialization - firm satisfies multi-faceted needs of one particular group.the firm gain the strong reputation for specializing in serving this customer group and become a channel of customer for all new product that the customer group could feasibly us • Full market coverage - Firm serves all customer groups with products they might need. • * undifferentiated marketing - entire market receives the same program • * Differentiated marketing - different programs for different segments

• • • •

Single-Segment Concentration - niche Product Specialization - 1 product, different markets Market Specialization - 1 market, different products Selective Specialization - different segments each matching the firm’s competitive advantages

• Full Coverage - all products, all markets

Undifferentiated Marketing – Focus on what is common among consumers – Mass marketing – An undifferentiated marketing approach aims at a large, broad consumer market through one basic marketing plan – It focuses on buyer’s need rather than differences am ong buyers. – It relies on mass distribution and mass advertising. Coca-cola early marketing of only one drink in one bottle and one taste.

•   Concentra te d Ma rk etin g A concentrated marketing approach aims at a narrow, specific consumer group through one specialized marketing plan catering to the needs of that segment. • Concentrated marketing is popular for small firms for these reasons: • Mass production, mass distribution, and mass advertising are not necessary. • It can succeed with limited resources and abilities by concentrating efforts. • . If concentrated marketing is used, it is essential for a firm to do a better job than competitors in several areas. • 1. The company needs to tailor its marketing program for its segment better than competitors.

• Diffe rentiated Mark eting (M ultiple S egmentatio n) • firms operates in several marketing segments and design different programs for each segment. • . It appeals to two or more distinct market segments, with a different marketing plan for each. Company resources and abilities must be able to produce and market two or more different sizes, brands, or products. Costs vary, depending on modifications needed. •

Wholesalers and retailers usually find differentiated marketing to be desirable, because it enables them to reach different consumers, Total profits should rise as the number of segments serviced increases.

A firm must balance revenues obtained from selling to multiple segments against the costs. • in differentiated marketing the following cost is likely to be higher : • Product modification cost: cost • modifying g a product to meet different market segment requirement usually involves some R/D , engineering and /or special tooling cost. • Manufacturing cost: • It is usually more expensive to produce ten units or ten different products then 100 units of one product.

• Administrative cost: • The company has to develop separate marketing plans for each market segment.this requires extra marketing research , forecasting etc. • Inventory cost; • It is more costly to manage inventories containing many products than inventories containing few products. • Promotion cost; • The company has to reach different market segments with different promotion programs.