Target Market Selection

After profiling segments, firms have to make a decision on how many segments to target. Evaluation of segments is done before selection.

Five Patterns of Target Market Selection

• Concentrated Marketing

  • Advantage: The firm gains a strong knowledge of the segment's needs and achieves a strong market presence

  • Risks: A market segment may turn sour and competitor may invade the segment

  • Companies may try super-segments: A set of segments sharing some exploitable similarity

• Selective Specialization

  • The firm selects a number of segments, each objectively attractive and appropriate

  • Advantage: risk diversification

• Product Specialization

  • The firm makes a certain product and it sells to several different market segments

• Market Specialization

  • The firm concentrates on serving many needs of a particular customer group

• Full-market Coverage

  • The firm attempts to serve all customer groups with all the products that they may need

  • Undifferentiated Marketing

    • The firm ignores segment differences and goes after the whole market segment

  • Differentiated Marketing

    • The firm operates in several market segments and designs different products for each segment