TARGET MARKET ' Target market is that a group of potential buyers (Potential Market Segment) selected by a company for aiming its marketing efforts or in other words target market is that group of potential buyers (potential market) at whom company aims its marketing efforts. NOTE: As we have discussed before that group of potential buyers are those people who have want to satisfy, money to spend and are willing to spend in order to buy the product which could satisfy their want. Such group is also called market segment . SELECTION OF TARGET MARKET There are two ways / approaches to select target market . 1. Market Aggregation . 2. Market Segmentation.Market Aggregation Approach / Strategy to Select Target Market ‘When all groups of potential buyers (Potential Market Segment) in the total market have same view about company’s product in terms of need and choice / preference standards ....... OR in other words when all groups of potential buyers in the total market tend to have the same perception about want satisfying benefits of company’s product. Then in such case all those groups of potential buyers (Potential Market Segments) are viewed as single unit for being treated as target market and accordingly single marketing mix is developed aimed at all those groups of potential buyers .ILLUSTRATION The products for which different groups of potential buyers have same perception about want — satisfying benefits are called non — differentiated products such as GASOLINE , SALT , SUGAR, and for such products company will employ market aggregation approach while selecting target market and accordingly all groups of potential buyers will be treated as single unit and single marketing mix will be developed to achieve company’s marketing objective. Market Segmentation Approach / Strategy To Select Target Market Market segmentation is the opposite of market aggregation , Under market segmentation total market is divided into sub groups of potential buyers . Q) But when does company do so for target market selection A) When there are several groups of buyers who have special needs and preferences about company’s product and 3have substantial demand potential , then all those groups are treated as target market and separate marketing mix is developed to satisfy each group of potential buyers (so called cach market segments . Factors Behind Special Choice And Preference With Each Market Segments (Sub Groups of Total Market) The factors behind special choice / preference can be expressed under three areas. 1) Demographic Elements Discussed Before) 2) Regional Variances / Geographic Condition (Discussed Before). 3) Psychographic Factors 4) Desired Product Benefits Factors Bement fae font notes Ges We Sine re Bem 35) Useoe Lite 43SEGMENTATION APPROACHES There are two ways or approaches for market segmentation 1. Single - Segment Approach: 2 Multiple - Segment Approach SINGLE-SEGMENT APPROACH: Under single segment strategy / approach for the selection of target market. One market segment is selected as target market and single marketing mix is developed to reach that segment. eS This strategic approach is employed by the company’s which da’ m «+ not have sufficient resources to manage more than one segment in relation to competition. That limitation might be in terms of financial constraints or in sufficient human resources. Or in other words it can be said that a small company may want to concentrate on a single market segment. Benefits with Single - Segment Approach: Some time a strong resourceful company would like to work on single segment, the reason behind this approach is that this strategy enables a company to penetrate on one segment in depth an acquire a reputation as a specialist or an expert in a limited @> market.Limitation with Single —- Segment Approach: With this strategy when a company has acquired an image within a particular segment, then other segment perceive them patent to that segment they have been for. For example Suzuki Automobile Company has selected middle class segment for their automobile and for a long time they have been on this segment, now if they want to enter new market of high income / upper class, they would not probably be responded by that segment because Suzuki has required an image of middie - standard automobile use by middle class. Multiple — Segment Approach / Strategy In the multiple-segmentation, two or more different groups of Potential customers are identified as target market. Then a separate marketing mix is developed to reach each segment. For example. A marketer of personal computers, might identified three separate market segments such as...... college students, small businesses, teachers etc. and then designed separate marketing mix for each segment. As part of the strategy of multiple-segment approach, a company will develop a variety of products (in terms of demand satisfying attributes) But market segmentation can also be accomplished with no change in product, but other element of marketing mix can be tailored to each segmentFor example. Color cosmetic product One segment is Teen Aged Girls Second segment is Middle Aged Women Since product attribute demanded by both segments are same, therefore product attribute in terms of features and benefits will be designed in same manner. ... BUT promotional program will be different for each of the two segments because each of the two segments get inspired with different promotional features. Benefit with Multiple-Segment Approach / Strategy: The most evident benefit of this strategy is that its results is greater sales volume and profitability than a single-segment approach. Limitation with Multiple-Segment Strategy: Probably the biggest draw back to the Multiple-Segment Strategy is that the unit cost of production in cost of promotional increase when multiple-segments are targeted.