TARGET MARKET

TARGET MARKET

Very rarely does a product cater to the entire market. Most products are designed to cater to a group of customers who specifically want such a product. This group of customers is the target market which is a slice of the total market. We say it is the market segment.

Target Market based on demand




SEGMENTATION–TARGETING

MARKET SEGMENTATION

Dividing the market into distinct groups with distinct needs, characteristics or behaviour who might require separate products.

TARGET MARKETING

The process of evaluating each market segment’s attractiveness and selecting one or more segments for mass marketing & niche marketing.

Market Targeting—

• Single segment concentration 
• —Selective specialization 
• —Product specialization 
• —Market specialization

—Full Market coverage - undifferentiated marketing differentiated marketing

Steps; Market Targeting



Target Market Strategy
The major strategy used in the target marketing is the further classification of market into sub group such as,

• Mass marketing strategy.
• Concentrated marketing strategy.
• Differentiated marketing strategy.
• Personalized marketing. 

Differentiation

• —For the successful marketing; three key factors i.e. Segmentation, Differentiation and positioning. 
• —Determine the major differentiating attributes available to firms . 
• —Describe the marketing strategies that are applied at each stage of the product life cycle. 
• —Now let us see how most of the Marketing Authors have defined differentiation as: An act of designing a set of meaningful differences to distinguish the company’s offering from its competitor’s offerings. 
• —The concept of “differentiation” is an important piece of the marketing puzzle. 

Companies can differentiate its market offering dimensions of;
1.Product,
2.Service,
3.Personnel,
4.Image,
5.Price,
6.Distribution,
7.Promotion in order to distinguish the company from its competitors.
—
— Positioning of product 

• Keller defines positioning as the process of identifying and establishing points of parity and difference to establish the right brand identity and to create proper brand image. 
• Kotler defines brand positioning as an act of designing the company’s offer and image so that it occupies a distinct and valuable place in the target consumer’s mind.

Positioning

• —Positioning is a concept in marketing which was first popularized by Al Ries and Jack Trout in their bestseller book " Positioning - a battle for your mind“ in the year 1969. 
• —Positioning is all about ‘perception’. As perception differs from person to person, so do the results of the positioning map e.g. what you perceive as quality, value for money in terms of worth. Something (perception) that happens in the minds of the target market.
• —Positioning is defined as the act of designing the company’s offering and image to occupy distinctive place in the target market’s mind.—
• —Thus the end result of a positioning strategy is a Distinct Value Proposition over the other competitors products–a reason for which the customer would buy the product. 

Product positioning process/steps

• Defining the market. 
• —Identifying the attributes. 
• —Analyze the attributes of competitors & customers perceptions. 
• —Determine each product's share of mind
• —Determine each product's current location in the product space
• —Determine the target market's preferred combination of attributes.
• —Examine and position of your product

Positioning concepts

Three types of positioning concepts:
A. Functional positions

• —Solve problems 
• —Provide benefits to customers 
• —Get favorable perception by investors & lenders 

B. Symbolic positions

• —Self-image enhancement 
• —Ego identification 
• —Belongingness and social meaningfulness 
• —Affective fulfillment 

C.Experiential positions

• —Provide sensory stimulation 
• —Provide cognitive stimulation 

The Tata Gesture

• ——Taj Hotel Mumbai, on 26th November, a significant part of the hotel was burnt down and destroyed the hotel was re-opened on 21st December and all the employees of the hotel were paraded in front of the guests. 
• —All category of employees including those who had completed even 1 day as casuals were treated on duty during the time the hotel was closed. 
• —Relief and assistance to all those who were injured and killed.
• The relief and assistance was extended to all those who died at the railway station, surroundings including the Pav-Bhaji vendor and the pan shop owners. 
• —During the time the hotel was closed, the salaries were sent by money order. 
• —A psychiatric cell was established in collaboration with Tata Institute of Social Sciences to counsel those who needed such help. 
• —The thoughts and anxieties going on peoples mind was constantly tracked and where needed psychological help provided 
• —Employee outreach centers were opened where all help, food, water, sanitation, first aid and counseling was provided. 1600 employees were covered by this facility. 
• —Every employee was assigned to one mentor and it was that person's responsibility to act as a single window clearance for any help that the person required. 
• —Ratan Tata himself asked the families and dependents as to what they wanted him to do. 
• — —The dependents of the employees were flown from outside Mumbai to Mumbai and taken care of in terms of ensuring mental assurance and peace. They were all accommodated in Hotel President for 3 weeks. 
• —Ratan Tata personally visited the families of all the 80 employees who in some manner either through injury or getting killed were affected. 
• — —In a record time of 20 days, a new trust was created by the Tatas for the purpose of relief of employees. 
• —What is unique is that even the other people, the railway employees, the police staff, the pedestrians who had nothing to do with Tatas were covered by compensation. Each one of them was provided subsistence allowance of Rs. 10K per month for all these people for 6 months. 
• —A 4 year old granddaughter of a vendor got 4 bullets in her and only one was removed in the Government hospital. She was taken to Bombay hospital and several lacs were spent by the Tatas on her for full recovery. 
• —New hand carts were provided to several vendors who lost their carts. 
• —Tatas will take responsibility of life education of 46 children of the victims of the terror. 
• —This was the most trying period in the life of the organization. Senior managers including Ratan Tata were visiting funeral to funeral over the 3 days that were most horrible. 
• —The settlement for every deceased member ranged from Rs. 36 to 85 lacs in addition to lot more benefits. 

How TATA has Position the concepts
A.Functional positions
B.Symbolic positions
C.Experiential positions

*** Target Market***

Also Read Market Segmentation Market Analysis Marketing Environment Marketing Process

Market Segmentation

Market Segmentation 

—Identify the “potential and prospective consumers” in their marketing territory. Such prudent identification keeps the marketing process on up trend.

Thus, some marketing experts and researchers have described market segmentation as the strategy of “Dividing the market in order to conquer them”

As a management student and a marketer has to look for the best ROI-Return On Investment- if S/he does not do that, then it is great defeat of the object. Hence segmentation gives direct focus on the following narrated points to get more yield,

• To get more return on market-spending.
• To do niche marketing.
• Keep vibrant presence in market.
• Create brand equity in the market.
• Generate better stock turn-over-ratio.
• Register good sales performance year-after-year.
• Use of available resources in efficient way on potential & perspective consumers

These are the obvious reason why a business tycoon look for segmentation and it is very important tool of marketing to do best marketing. Now let us go into the application of the segmentation based on the various significant variables of the market.


Application of the Market Segmentation
The major market segment are based on the needs of the segments. When needs of segment is determined, the market will be targeted and products will be positioned in the market. Major Market Chart is shown below,

Basis for market segmentations
The further gridding market segmentation is based on the various variables, the significant variables are shown below,

• Geographic segmentation.
• Demographic segmentation.
• Economic Segmentation.
• Psychographic segmentation.
• Behavioral segmentation.
• Volume segmentation.
• Benefit segmentation.

Much use segmentations

• Demographic Segmentation is much in use, however it differ from product to product and subject to various market condition. 
• For the niche and brand sensitive customer the Psychographic Segmentation is used. 
• The Indian market has classified into Four Tier market based on the income, the same is depicted herein. 

Psychographic Segmentation

Psychographic is study of life style, personality traits, interest social status, society belongingness etc., One of the popular method of psychographic study is AIO Framework (Activities, Interest and Opinion) with profiling demographic explanation. Recently Stanford Research Institute has developed second popular model known as VALS ( Value and Life Style )
Now let us know what are effective element are required for the effective market segmentation. 

Effective element of market segmentation

Marketer need to do effective, productive and prudent market segmentation to fetch best results over the competitors and as well as to suit the requirement of the organization. The major criteria are,

• Identify. 
• Accessibility. 
• Responsiveness. 
• Size. 
• Nature of Demand. 
• Measurability. 
• Profitable.

*** MARKET SEGMENTATION ***

Market Analysis

—In market analysis, you will study and understand;
1.Market Segmentation
2.Target Market.
3.Positioning and Differentiation.
4.Market Research.
5.Market Information System.
6.Competition Analysis.
—

 Market Segment
—A large identifiable group within a market with similar wants, purchasing power, geographical locations, buying attitudes.
—In precise, market segmentation is all about classifying of heterogeneous market into homogeneous market, in which a set of group of people/customers have a similar need and demand pattern.

Niche Marketing
—What is an attractive niche ?
—A distinct set of needs
—A premium can be charged
—Not likely to attract competition
—Gains certain economies through specialization
—Sufficient size, profit and growth potential

Local Marketing
—When the marketing mix is altered to suit the local conditions e.g., Giving a higher/ lower discount than what’s prevailing in the rest of the markets or implementing a different promotion scheme.

Individualized Marketing
—When the firm deals with each customer on a one – to – one basis
—When products are customized for the customer

Behavioral variables—Occasions – birthdays, lunch time, vacations
—Benefits – eg.travel – business, vacation, educational
—User status – non users, ex users, first time users, regular users, potential users
—Usage rate – light, medium, heavy
—Loyalty status – die hard, shifters ,switchers
—Buyer Readiness – unaware – aware – informed – interested – desire – intention to buy
—Attitude – enthusiastic, positive, indifferent, negative, hostile

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—

Marketing Environment

Marketing Environment

—Marketing environment is divided in to two broad categories- micro environment, that is specific to the given business, and macro environment, specific to the overall industry.

—Micro Environment – Factors that an organization has direct control over
—Macro Environment – Factors on which organization has no control at all.

—The firm covers both these parts in its environmental analysis. Thus it involves the diagnosis of the mega environment as well as the environment that is specific to the given business. —Under the mega or the macro environment the firm studies the political, demographic, and the other environmental factors. As regards the environment that is specific to the given business, the firm studies the position of the industry concerned, especially aspects such as the structure of the industry, the nature of competition, the scope for invasion by substitute products, etc. It also studies factors relating to the customer and factors relating to demand.

— —Marketing Environment is nothing but external forces which influence on the marketing kit of the company and ultimately consumer will be benefitted out of the Marketing Environment.
— The government policies plays core role along with the technological intrinsic element of opportunity and other factors as part of marketing environment.
—Marketing Environment has lots of in-depend and un-controllable variables of the social and economic factors, which matters most on the marketing mix of the company.

— —According to Philip Kotler, “The company’s marketing environment is made up of the sectors & forces outside the firm are marketing function which infringe upon the ability of marketing management to develop & maintain a successful relationship with the firms target audience”.
—The marketer has to do lot of forecasting of his product strategy both micro as well as macro level and draw a suitable marketing strategy to market his products.
—Indian market has un-controllable variables & factors. Economic, Cultural, Social, Political, Technological, Legal, Demographic & lot more Factors.

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—A particular market environment and formulating strategies is mainly based on the SWOT Analysis tool.
—SWOT Analysis: When you are planning strategically based on the environment with any company it is useful to complete an analysis that takes into account not only your own business, but your competitor’s businesses and the current business environment as well. Completing a SWOT analysis helps you to identify ways to minimize the effect of weaknesses in your business while maximizing your strengths. Ideally, you will match your strengths against market opportunities that result from your competitors’ weaknesses or voids.

Marketing Environment- A SWOT Analysis






—Performing SWOT or Situation Analysis

—Organization identifies internal strengths and weaknesses & external opportunities and threats. It seeks to answer two general questions:

1. Where is the firm now?
2. In what direction is it headed?

—As a matter of fact the situation analysis accomplishes the following:

• —It recognizes strengths and weaknesses relative to competitors.
• It searches the environment for opportunities and threats.
• It assesses an organization’s ability to capitalize on opportunities and to minimize threats.
• It anticipates competitors’ responses to company strategies.

— The Marketing Environment

External Environment: Outside factors that influence marketing programs by posing opportunities or threats

Five environmental factors:

• —Political-Legal Environment
• —Social-Cultural Environment
• —Technological Environment
• —Economic Environment

—Competitive EnvironmentApplication of SWOT Analysis

—Situation analysis can, and should be, conducted at any point in an organization’s life. Based on the total analysis, a product can be plan.



The Industry Life Cycle
The Industry Life cycle reflects the changes that take place in an industry over a period of time.

Birth stage: firms seek to develop a winning technology.

—Growth stage: Product gains customer acceptance and grows rapidly. New firms enter industry, production improves, distributors emerge.

—Shakeout stage: at end of growth, there is a slowing customer demand. Competitor rivalry increases, prices fall. —Least efficient firms fail and leave industry.

—Maturity stage: most customers have bought the product, growth is slow. Relationships between suppliers, distributors more stable. Usually, industry dominated by a few, large firms.

—Decline stage: falling demand for the product. —Prices fall, weaker firms leave the industry.

*** Marketing Environment ***

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Marketing Process

Marketing Process

—Marketing is an ongoing dynamic process involving a set of interacting activities dealing with a market offering by the producers to consumers.
—Marketing process involves the sales and demand forecasts methodology and application of marketing mix. The entire marketing process differs from company to company, product to product, but always it confined to the company’s corporate goals and corporate capabilities.
—The marketing process brings together producers and consumers – the two participants in exchange. The marketing process involves three major activities; the same is known as heart of marketing.

The marketing process involves three major activities; the same is known as heart of marketing.

1. —Concentration 
2. —Dispersion 
3. —Equalization 

Marketing research is the starting point in the marketing process to ascertain and identify consumer needs and desires through market analysis and investigation.
— —Marketing Process Model

The marketing process model can be used to help you to decide how to take a new offer to market. It can also be used to test your existing marketing strategy. Whether you are considering a new or existing offer, following steps will help,

1. Start by identifying the product or service that you want to analyze.

2. Try asking "why" and "what if" questions too, to challenge your offer e.g ask why your target audience needs a particular feature. What if you drop your price by 5%? What if you offer more colors? Why sell through wholesalers rather than direct channels? What if you improve PR rather than rely on TV advertising?

—3. Now go through and answers the 4 Ps questions.

4. Once you have a well-defined marketing mix, try "testing" the overall offer from the customer's perspective, by asking customer focused questions:
—Does it meet their needs? (product)
—Will they find it where they shop? (place)
—Will they consider it's priced favorably? (price)
—And will the marketing communications reach them? (promotion)
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 5. Keep on asking questions and making changes to your mix until you are satisfied that you have optimized your marketing mix, given the information and facts and figures you have available.

6. Review you marketing mix regularly, as some elements will need to change as the product or service, and its market, grow, mature and adapt in an ever-changing competitive environment.
—Thus marketing process is nothing but Concentration, Dispersion and Equalization to meet the customers demand and have better share of the market.

—*** Marketing Process ***

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