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2.3.3 Targeting Strategies

Key Parameters for Target Segment Selection

  1. Segment Size and Growth:
  2. Evaluate the market's current size and future growth potential.

  3. Allocate a weight to prioritize this factor based on its importance.

  4. Structural Attractiveness:

  5. Use Porter's Five Forces model to assess market competitiveness and profitability.

  6. Weight this factor according to its relevance.

  7. Organizational Objectives and Resources:

  8. Align segment selection with business goals (e.g., revenue, growth, customer satisfaction).
  9. Consider the available resources (manpower, capital, technology).
  10. Weight this factor based on organizational readiness and capacity.

Weighted Average Scoring Method:

  • Assign weights to the parameters (e.g., size, growth, attractiveness, resources).
  • Score each potential segment on these parameters.
  • Calculate the weighted average for each segment.
  • Select the segment with the highest score for targeting.

Targeting Strategies

After selecting the target segment, marketers can adopt one of the following targeting strategies:

1. Single Segment Concentration

  • Definition: Focus exclusively on one segment.
  • Example: Offering cosmetics for adult women only.
  • Benefits:
  • Deep understanding of the segment.
  • Tailored strategy for higher effectiveness.
  • Drawback: High risk if the segment's demand decreases.

2. Selective Specialization

  • Definition: Focus on multiple segments with distinct offerings for each.
  • Example:
  • Shoes for teens.
  • Cosmetics for adult women.
  • Apparels for elder women.
  • Benefits:
  • Spreads risk across segments.
  • Higher market reach.
  • Drawback: Requires more resources to manage multiple segments.

3. Product Specialization

  • Definition: Focus on one product type for all segments.
  • Example: Selling cosmetics for teens, adults, and elders.
  • Benefits:
  • Expertise in a specific product category.
  • Efficient production and marketing processes.
  • Drawback: Risk if demand for the product decreases across segments.

4. Market Specialization

  • Definition: Satisfy all the needs of one specific segment.
  • Example: Offering cosmetics, apparels, and shoes for adult women.
  • Benefits:
  • Strong loyalty from the target segment.
  • High market share in the chosen segment.
  • Drawback: Vulnerable to shifts in the segment's preferences or size.

5. Full Market Coverage

  • Definition: Serve all segments in the market.
  • Types:
  • Differentiated Marketing:
    • Different offerings for different segments.
    • Example:
    • Cosmetics with varied pricing and promotions for teens, adults, and elders.
    • Apparels designed differently for each segment.
    • Benefit: Higher customization and relevance for each segment.
    • Drawback: High costs for production, marketing, and logistics.
  • Undifferentiated Marketing (Mass Marketing):
    • Same offering for all segments.
    • Example: One type of shampoo marketed to all age groups.
    • Benefit: Economies of scale.
    • Drawback: Limited relevance to individual segments, lower engagement.
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