How to Identify Profitable Target Market with 4 Target Marketing Strategies and 3 Market Coverage Strategies.

Target marketing is the process of formulating market coverage policies – which segments of the market provide the best opportunities for the company.

The process of target marketing (note that the terms ‘target marketing’ and ‘market targeting’ are interchangeable) is the manipulation of the marketing mix such that a distinctive product is made available for each chosen market segment. It involves formulating market coverage policies that determine the segments of the market that present the best opportunities.

When the segmentation process has taken place, each identified segment must be assessed in order to decide whether or not it is worth while serving as a profitable target market with its own distinctive marketing mix. If a company decides not to operate a ‘blanket’ strategy (no segmentation), then it is engaging in what is called a ‘concentrated’ or ‘differentiated’ market targeting strategy. The company then has to decide which potential segments to serve.

Favourable attributes of a target market will include segments where there is good sales and profit potential, where competition is not too intense and where the segment might have some previously unidentified requirements that the company is able to serve.

Target marketing processes identify the particular direction the company wants to follow in accordance with its understanding of market segmentation. It leads to the development of market positioning strategies.

Method
A decision is required about which of the following market coverage strategies will produce the best results:

 Undifferentiated marketing – ignoring segments and attacking the whole market, aiming to satisfy the common needs of customers.
 Differentiated marketing – operating in several segments of the market and designing separate offers for each.
 Concentrated marketing – aiming for a large share in one or a few segments.
The decision will be influenced by the following factors:
 Company resources, which will determine the extent of coverage that is achievable.

 Product and market homogeneity – the more homogeneous the product or market, the greater the pressure for undifferentiated targeting.

 Product stage in the lifestyle – it might be appropriate to go for wide coverage in the initial stages and to target specific segments as the product matures.
 Competitors’ segmentation strategies – the company may wish to target market segments neglected by competitors.

Target marketing strategies
The following strategies can be adopted for target marketing:
 Differentiated, where there are multiple marketing mixes for different market segments.
 Undifferentiated, where there is a single marketing mix for all customers.
 Concentrated, which has one marketing mix for a segment of the entire market.
 Custom, which attempts to satisfy each customer’s needs with an individual marketing mix.

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