Choosing the target Market
To succeed in now days' competitive marketplace, companies have to be customer centred. They ought to win customers from competitors and keep them by delivering superior value.
- Sound marketing needs a careful, deliberate analysis of the consumers.
- As companies cannot satisfy all consumers in a given market, they have to divide up the total market (market segmentation), select the best segments (market targeting), and design strategies for profitably serving selected segments better than the competition (market positioning).
Market segmentation is the procedure of dividing a market into different groups of buyers with different characteristics, needs or behaviour who may require separate products or marketing mixes. Market targeting is the procedure of evaluating each market segment's attractiveness and choosing one or more segments to enter. A company should target segments in which it can produce the greatest customer value and sustain it over time. A company can decide to serve just one or a few special segments, or possibly it might decide to offer a total range of products to serve all market segments. Special segments can be called "market niches." Most of companies enter a new market by serving a single segment, and if it proves successful, they add segments.
Market positioning is arranging for a product to occupy desirable place and apparent distinctive relative to competing products in minds of target consumers. In positioning a product, a company first needs to recognize possible competitive advantages upon which to build the position. To achieve competitive advantage, the company have to offer greater competitive advantage to the target segment. The company's total marketing program should support the selected positioning strategy. Effective positioning start with really differentiating the company's marketing offer so that it provides consumers more value than they are offered by competition.