Once a firm has identified the market segments it wishes to target, it needs to develop effective targeting strategies for these segments. Targeting strategies tend to follow certain methods to maximise their effectiveness:
- A single segment strategy involves the firm choosing its single preferred market segment and targeting it with a single marketing mix, aimed at serving the segment as well as possible. This is generally chosen by a smaller firm, or one which has only located one attractive market segment.
- A differentiated strategy occurs when a firm targets its products at a variety of different segments using different marketing mixes. Often the product characteristics may be different across different segments; however it may be only the marketing and promotional details that are different across the segments.
- A product specialisation strategy occurs when a firm possesses a particularly attractive product, and hence tailors it to a variety of feasible market segments.
- A market specialization strategy involves a firm which finds one market segment very attractive, and hence that segment a variety of different products. This is often done by a firm to fill up a segment, and hence discourage any competitors from entering.
- Full market coverage occurs when a firm tries to serve all segments in an entire market. This does not always imply a mass market strategy; instead a firm can offer a variety of marketing mixes to every major segment in a market. This is what many supermarket chains have attempted with their value, standard and premium ranges.
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Most market targeting theories argue that a firm attempting to enter a new market should target the most attractive and suitable segment. This will enable the firm to gain a foothold in the market, and develop some credibility with customers. Once this credibility has been obtained, the firm can expand into other segments through a market specialisation strategy; develop more products for the same segment using a product specialisation strategy; or develop its products for other sectors using a differentiated strategy. Once a firm has become well established in a variety of segments with a variety of products, it can look to pursue a full market coverage strategy.
One final targeting strategy which is gaining more following is the concept of individual marketing. This strategy is based on using previous customer purchase data to offer specific products to individual consumers based on their past preferences. This has the potential to specifically target customer needs, however it also requires large amounts of data and effective data management which many companies struggle with. However some companies, particularly supermarkets such as Tesco, have had some success in implementing such a strategy as they are able to gather and manage large amounts of regular customer data using loyalty card schemes.