Selection of target market

Selection of target market:

 After the doing the market segmentation, the firm has to evaluate the segments for their market potential. Then the company has to decide which and how many segments to serve and how to serve them. After evaluating different segments, the company can consider five patterns of target market selection:

• Single segment concentration: under this strategy only one market segment is served with one marketing mix. Through concentrated marketing the firm can gain a strong knowledge of segments needs and achieve a strong market presence.

• Selective specialization: Under this strategy a firms selects a number of segments, each objectively appropriate and attractive. This multi-segment strategy has the advantage of diversifying the firms’ risks. Different marketing mixes are offered to different segments. The product itself may or may not be different.

• Product specialization: under this strategy the firm specializes in a particular product and tailors it to different market segments. Example a Microsoft manufacturer who sells to university, government, and commercial laboratories.

• Market specialization: The firm specializes in serving a particular market segment and offers that segment an array of different products. In other words the firm concentrates on serving many needs of particular customer group.

•   Full market coverage: under this segment the firm attempts to serve all market segments. The firm attempts to serve all customer groups with all the products they might need. Firms can cover a whole market in two ways:
  
  1.  Undifferentiated marketing: the firm ignores segment differences and goes after the whole market with one offer.
     2. Differentiated marketing: under this different marketing mix is offered to different market segments.