Strategy Plans
3) The major steps in the target market selection process are 1 identifying the appropriate targeting strategy. The strategy used to select a target market is affected by the target market characteristics, product attributes, and the organizational objectives and resources. There are three basic targeting strategies. They are undifferentiated target strategy which an organization defines an entire market for a particular product as its target market. Then there is the concentrated targeting strategy, which is a strategy that organizations use to target a single marketing segment using one marketing mix. The purpose is to design a marketing mix that matches the needs of consumers. Next there is the differentiated targeting strategy, whi
Step three is to develop market segment profiles which describes the similarities among potential customers and explain the differences among people and organizations in different segments. Step two is determine which segmentation variable to use. There are also advantages and disadvantages to the differentiated targeting strategy. However there are some disadvantages. Also a company with excess production capacity may find a differentiated strategy advantageous because the sale of products to additional segments may absorb excess capacity. An important initial issue to consider in selecting a target market is whether there are enough differences in customer needs to warrant the use of market segmentation. In the evaluation several factors like sales estimates, competitors, and estimated costs associated with each segment, should be determined and analyzed. The advantages of a concentrated targeting strategy is how the company is better able to develop a satisfying marketing mix for a relatively small portion of the total market rather than developing a mix to meet the needs of all people. Some of the variables to consider are the geographic, psychographic, and behavioristic variables. Advantageously a firm may increase sales in the aggreg!ate market through as differential strategy because its marketing mixes are aimed at more people. Step 4 is to evaluate relevant market segments. ch is where an organization targets two or more segments by developing a marketing mix for each. Thus, production costs may be higher than with a concentrated strategy. Segmentation variables are the characteristics of individuals, groups or organizat!ions used to divide a market into segments. It also permits a firm with limited resources to compete with larger organizations, which may have overlooked smaller segments.
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Acceptance Essays
