Market targeting is a process of identifying groups of consumers who are highly likely to purchase a specific good or service. Businesses of all sizes engage are some form of this marketing essential as part of their efforts to secure and maintain customers.
4.3.1 DEFINE MARKET TARGETING
Target Marketing – the process of evaluating each market segment’s attractiveness and selecting one or more segments to enter.
After evaluating different segments, the company must now decide which and how many segments it will target. A target market consists of a set of buyers who share common needs or characteristics that the company decides to serve.
4.3.2 DESCRIBE MARKET TARGETING STRATEGY
Generally, target marketing can be carried out at several different levels: Undifferentiated Marketing, Differentiated Marketing or micromarketing.
1. Undifferentiated Marketing
Undifferentiated Marketing (mass marketing) strategy, a firm might decide to ignore market segment differences and target the whole market with one offer.
This mass marketing strategy focuses on what is common in the needs of consumers rather than on what is different. The company designs a product and a marketing program that will appeal to the largest number of buyers. It relies on mass distribution and mass advertising, and it aims to give the product a superior image in people’s minds.
The disadvantages are it is difficult to develop a product and services that will satisfy all customers. Moreover, mass marketers often have trouble in satisfying the needs of specific segments and niches.
For example, Kuching Water Board – only supply water – not provides choices for customer (vanilla, mineral etc)
Air Asia – only offer 1 type of class to all customers
2. Differentiated Marketing
Using a differentiated marketing (or segmented marketing) strategy a firm decides to target several market segments and designs separate offer for each.
For example, Nike offers athletic shoes for different types of sports, running, fencing, golf, aerobics, bicycling and baseball. Visa offers not only its traditional credit cards but also gold cards, platinum cards and corporate cards.
* higher sales
* develop stronger position within each market
* Increase the costs of doing business(costs of price, place, promotion and products) * Have to develop separate marketing plans for the separate segments – different marketing plans for different Market segment.
Other related example:
MAS – offer business class and economy class
3. Concentrated marketing
Concentrated marketing or (niche marketing) is especially appealing when company resources are limited such as diamond and tropical fish. The firm goes after a large share of one or a few segments or niches.
For example, Swarovski is a global leader in crystal ornaments.
1. niches are smaller and may attract only one or a few competitors 2. achieves strong market position because its greater knowledge of consumer needs in the niches 3. Can market more effectively by fine-tuning its products, price, and programs 4. Can market more efficiently
1. High profit
2. higher-than-normal risks
3. will suffer greatly if the segment fail
4. larger competitor may decide to enter the same segment
Micromarketing is the practice of tailoring products and marketing programs to suit the tastes of specific individuals and locations. Micromarketing includes local marketing and individual marketing.
Local Marketing. Local marketing involves tailoring brands and promotions to the needs and wants of local customer groups – cities, neighborhoods, and even specific stores. 7-Eleven routinely customize each store’s merchandise and promotions to...