A target market is a segment or the customer group that is to be selected to serve. A businessman should critically evaluate the target market segment before entering into that market. If the decision of choosing the market segment is not right then it becomes very hard to achieve the desired goals from this target market. The given article discusses about the definition of target market, example of target market, considerable factors for choosing a target market, ways to determine the attractiveness target market, characteristics of a good target market, market targeting process, 25 different types of target market on the basis of market segmentation, target marketing strategies and some other relevant issues for efficient market targeting. To know more, visit Wikipedia.
Definition of Target Market:
The market or the customer group is going to be served by a company is to be considered as the target market. On the basis of the market attractiveness, some of the cases marketers choose one or more market to serve with the product or service.
Example of Target Market:
ABC shows company firstly divides the whole show’s market on the basis of user use purpose i.e. sports, daily use, climbing, etc. The kinds of sports i.e. athletes, footballers, cricketers, etc. Finally, choose or target the market of footballers.
Considerable factors for choosing a target market:
Choosing a target market, an entrepreneur should consider the market factor, technological factors, socio-cultural and economic factor, legal and political factors, market competitive factors of the target market and critically analyze their short-term and long-term influence on the business decisions.
- Market Factors: Market factors consist of market size, growth rate, life cycle stage, stability, price elasticity, cyclicality of demand, an opportunity of product differentiations, absolute and competitive advantages, required investment, the profitability of the target market, etc.
- Technological Factors: Influence of technology, paces of technological change, depending on other technology, etc.
- Socio-cultural and Economic Factors: Income level, the standard of living, Consumption pattern of the customer, etc.
- Legal and Political Factors: Government industry policy, VAT and tax policy, export and import policy, numbers of political parties and their ideologies, etc.
- Market Competitive Factors: Market entry and exit barriers, threats of a substitute product, bargaining power of buyers, bargaining power supplier, competitive rivalry among the competitors, etc.
How to determine the attractiveness target market?
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Characteristics of a good target market:
- To be measurable: The size of the market should be measurable. Example: Total market size is one million dollars.
- To be substantial: Having with the best synergy, it should cover a huge area. Example: Size of a new car, driving sits at left or right.
- To be assessable: Easy accessibility in the segment and serve the customer.
- To be differentiable: Each segment should differ from another in size, character, and showing distinctive behavior on same marketing action. Example: Segment-A like a discounted product but Segment-B dislike the same discounted product.
- To be actionable: Marketer can design effective marketing programs for specific market segments. Example: Various credit card can be sold.
Market Targeting Process:
Market targeting is a five-step process of determining the whole market to choose one or more market for serving through company product. It consists of determining the whole market, dividing the market into sub-market, evaluate the attractiveness of the alternative market, analyzing market profitability and choose one or more market to serve.
- Determining the whole market: The first stage of the market targeting process is to define the size of actual and potential customers for company products.
- Dividing the market into sub-market: In this stage, a marketer may apply one or more segmentation criteria to divide the selected market into sub-market on the basis of company objectives. For example, Bata shows firstly divides the whole show’s market on the basis of user use purpose i.e. sports, daily use, climbing, etc. The kinds of sports i.e. athletes, footballers, cricketers, etc.
- Evaluate the attractiveness of alternative market: Marketer should evaluate the attractiveness of each segment by considering market size, competitive industry, market growth, market accessibility, etc.
- Analyzing market profitability: Marketer should assess market profitability. Customer base, purchasing power, and consumption pattern, cost of customer reach and return.
- Choose one or more market to serve: Marketer choose one or more market to serve.
25 Different Types of Target market on the basis of Market Segmentation:
- Customer Age: Below 6 years (Kids), 6 to 12 years (Childs), 13-19 years (Teen Ager), 20-34 years (Young), 35-60 years (Adult), more than 60 (Old)
- Gender: Male, Female, common gender
- Income: Low income, middle income, high income
- Family Size: 1–2, 3–4, 5+; Dove Shampoo: Minipack, Small, Medium, Large or family size.
- Occupation: Businessman, Farmer, Service Holder, Doctor, Lawyer, Labor, Industrialist, Celebrity, etc.
- Religion: Muslim, Hindus, Cristian, Buddhist, etc.
- Race: Black, white, cross, etc.
- Status in life cycle stage: Unmarried and Married, Childhood, youth, older adolescence, adulthood, middle age, and old age, etc.
- User status: Lite user, Average User, Heavy user and Butterfly, Switchers, Stranger, Loyal customer
- Decision-making role: Dependent or Independent decision taker or Initiator, Influencer, Decider, Buyer, and User
- Benefit seeking tendency: Product quality, Style, Longevity, Service, Economy, Speed
- Cities Size: Under 20000, 20000-50000, 50000-100000, 100000-1000000, 1000000-5000000, 10000000 or more
- Climate: Northern, southern
- Regions: the Middle East, Indian Subcontinent, North America, etc.
- Density: Urban and rural
- Nation: Francis, Indian, American, Chains, Bengali, etc.
- Counties: USA, Chania, Russia, India, etc.
- Millennials (Gen Y): Birth Range: 1979–1994; Approximate Size: 78 million
- Gen X: Birth Range: 1964–1978; Approximate Size: 50 million
- Baby Boomers: Birth Range: 1946–1964; Approximate Size: 76 million
- Silent Generation: Birth Range: 1925–1945; Approximate Size: 42 million
- Personality Traits: Openness, Conscientiousness, Extraversion, Agreeableness, Neuroticism
- Lifestyle: Level of interests, thought process, behavior pattern
- Values: Personal values, Moral values, Aesthetic values, Universal Values, Instrumental Values, Intrinsic Values, Prerequisite Values, Paramount Values, Operative Values
- Attitude: Innovators, Early Adapters, Late adaptors, Late Majority, Lagers
Target market strategies:
Based on the nature of the market, an entrepreneur should take various types of product, price, place, promotion and some others business strategies.
The success and failure of a businessman mostly depend on the best target market selection. So, the marketer should critically evaluate the target market segment before entering into that market. Discussion about the definition of target market, example of this market, considerable factors for choosing this market, ways to determine the attractiveness target market, characteristics of a good target market, market targeting process, 25 different types of target market on the basis of market segmentation and target marketing strategies may helpful to a businessman to take target market decision in real business world.