2.3.1 Targeting Markets¶
Process of Targeting¶
- Segment Identification: Identify segments using criteria such as demographics, psychographics, geography, etc.
- Segment Evaluation: Evaluate each segment based on relevance, characteristics, and alignment with organizational goals.
- Segment Selection: Choose the segment(s) that align best with organizational resources and objectives.
- Positioning Strategy:
- Define the desired position of the product or service in the minds of the target market.
- Base the positioning on:
- Product characteristics or usage.
- Emotional aspects (e.g., societal or cultural relevance).
- Environmental or other specific factors.
- Develop messaging that resonates with the chosen positioning.
Criteria for Selecting a Target Segment¶
There are three major parameters or blocks of criteria for selecting a target market:
1. Segment Size and Growth¶
- Size:
- What is the current size of the market?
- A larger market size is typically preferred for profitability.
- Growth:
- Consider the future potential of the market.
- Avoid markets with limited or short-term growth prospects.
2. Market Attractiveness¶
- Assess how attractive the market is based on its structure:
- Competitive Landscape: Is there too much competition? Highly competitive markets may be less attractive despite their size.
- Barriers to Entry: Are there barriers that can limit your ability to operate or grow in the segment?
3. Organizational Objectives and Resources¶
- Objectives:
- What is the organization aiming for? Examples include:
- Growth
- Market share
- Revenue
- Profit
- Customer satisfaction
- Resources:
- Does the organization have the necessary resources to achieve its objectives in the chosen segment? Examples include:
- Manpower
- Financial power
- Technology solutions
- Alignment: Even if a market is large and attractive, it is not viable if the organization's resources are insufficient to capture and serve the market effectively.