TARGET MARKET SELECTION

Target marketing tailors a marketing mix for one or more segments

identified by market segmentation. Target marketing contrasts with mass
marketing, which offers a single product to the entire market.

Two important factors to consider when selecting a target market segment

are the attractiveness of the segment and the fit between the segment and the
firm's objectives, resources, and capabilities.

Attractiveness of a Market Segment

The following are some examples of aspects that should be considered when
evaluating the attractiveness of a market segment:

 Size of the segment (number of customers and/or number of units)

 Growth rate of the segment
 Competition in the segment
 Brand loyalty of existing customers in the segment
 Attainable market share given promotional budget and competitors'
expenditures
 Required market share to break even
 Sales potential for the firm in the segment
 Expected profit margins in the segment

Market research and analysis is instrumental in obtaining this information.

For example, buyer intentions, sales force estimates, test marketing, and
statistical demand analysis are useful for determining sales potential. The
impact of applicable micro-environmental and macro-environmental
variables on the market segment should be considered.

Note that larger segments are not necessarily the most profitable to target
since they likely will have more competition. It may be more profitable to
serve one or more smaller segments that have little competition. On the other
hand, if the firm can develop a competitive advantage, for example, via
patent protection, it may find it profitable to pursue a larger market segment.
Suitability of Market Segments to the Firm
Market segments also should be evaluated according to how they fit the
firm's objectives, resources, and capabilities. Some aspects of fit include:

• Whether the firm can offer superior value to the customers in the
segment
• The impact of serving the segment on the firm's image
• Access to distribution channels required to serve the segment
• The firm's resources vs. capital investment required to serve the
segment

The better the firm's fit to a market segment, and the more attractive the
market segment, the greater the profit potential to the firm.

Target Market Strategies

There are several different target-market strategies that may be followed.
Targeting strategies usually can be categorized as one of the following:

Single-segment strategy - also known as a concentrated strategy. One

market segment (not the entire market) is served with one marketing mix. A
single-segment approach often is the strategy of choice for smaller
companies with limited resources.

Selective specialization- this is a multiple-segment strategy, also known

as a differentiated strategy. Different marketing mixes are offered to
different segments. The product itself may or may not be different - in many
cases only the promotional message or distribution channels vary.

Product specialization- the firm specializes in a particular product and

tailors it to different market segments.

Market specialization- the firm specializes in serving a particular

market segment and offers that segment an array of different products.

Full market coverage - the firm attempts to serve the entire market. This
coverage can be achieved by means of either a mass market strategy in
which a single undifferentiated marketing mix is offered to the entire market,
or by a differentiated strategy in which a separate marketing mix is offered
to each segment.

A firm that is seeking to enter a market and grow should first target the most
attractive segment that matches its capabilities. Once it gains a foothold, it
can expand by pursuing a product specialization strategy, tailoring the
product for different segments, or by pursuing a market specialization
strategy and offering new products to its existing market segment.

Another strategy whose use is increasing is individual marketing, in which

the marketing mix is tailored on an individual consumer basis. While in the
past impractical, individual marketing is becoming more viable thanks to
advances in technology.
DEMOGRAPHICS TO CONSIDER IN TARGET
MARKETING
The point of target marketing is to identify consumer groups that are most
likely to purchase specific goods and services. Research into consumer
behavior shows that marketing targeted at certain demographic segments can
influence that group's spending habits.

The best thing about using target marketing techniques is that sellers have a
biographical sketch of their customers. This sketch allows businesses to
implement the marketing strategies that will most impress their intended
audience. Another benefit of target marketing is that it saves money. With a
knowledge of who their target is, companies save on advertising dollars and
postage costs because they're sure to receive more of a response from those
who need their products.

One of the downsides of target marketing may be that a large segment of the
population may be left out in the cold. Though demographics and
segmentation might give an overall view of the intended target, consumer
spending habits change greatly, depending on trends and economic factors.

Gender
Only a few years ago, target marketing based on gender proved a good
method for most businesses. Selling sports memorabilia or mountain
climbing equipment? Target men. Antique doll sellers and craft companies
went after women. But with society taking on more of a unisex lifestyle,
businesses should be very careful when using gender to market goods.
Though men and women use many of the same products these days,
subliminal messages can tell your target demo who your product is made to
serve. If your product is pink, then you're probably marketing it to females.
If the word "rugged" is a keyword in your campaign, then males are most
likely your target market.

Age
The age of potential consumers is one of the most important considerations
during the target marketing process. What age group will most likely spend
money for your product? Recent statistics have shown that preteens have
more buying power than they did last decade; cell phone and jean ads reflect
this demos growth as a target market.
Another example: Companies that sell alcoholic beverages or tobacco
products are prohibited by law to sell their goods to minors; that's why you
won't see these sorts of products advertised during commercial breaks for
children's shows. You will, however, see ads for alcohol and tobacco during
late night TV breaks and in magazines with a more adult focus.

Income
Who can afford to purchase your goods? When developing marketing
strategy, businesses should have a clear idea of what kind of money their
target market makes each year. The income of your target audience relates
directly to how well your product will sell.
Auto dealers who specialize in $16,000 cars will promote their inventory a
lot differently than those that sell cars worth $160,000. The former will not
place ads in luxury magazines; you won't find the latter's ads in budget
newsletters.

Lifestyle and Status

Is your target demo single? Married? Do they have children? These points
are crucial when determining how to market your goods and services. For
instance, it's probably not a good idea to place ads in singles magazines if
your target market is families. Other status demos that companies consider
depending upon their products are divorced people, college students, single
parents and pet owners. Religion and philosophy may also play a role in
marketing. You get the idea. Think about _who_ your target is and market
directly to them and their needs.

Social Class
Issues of class and race can sway a consumer's decision to buy a product--or
not. Upper-class factions want to purchase goods made for people of their
perceived level; lots of lower-class people want high-end goods, too--high-
end goods that they can afford. Target marketers will probably have to use a
bit of psychology in this area, since the ways which people perceive their
status might not always be accurate.
Geographic Location
Like accents, weather and lifestyle, the region in which a target market lives
is a major factor in determining what--and how--it spends. Ever notice the
difference in the ads you see in regional magazines? Or how local
commercials vary from region to region? That's target marketing. The way
noodles, for example, is marketed in New York (think soup) is different than
in Idaho (think casserole.)
Before a business can market a product effectively, it must be aware of who
their customer base is. The best way to learn about the people most likely to
buy a service is to research the success and failures of products similar to
theirs, review the present economic environment and reach out to the masses
by performing market research analysis.

3 targeting strategies an organization can adopt:-

1. Undifferentiated Marketing: - It is a standardization strategy option, where

the firm offers the same product, uses the same advertising, promotional,
distribution, publicity, public relations and pricing strategies to different
market segment. E.g.: - Pepsi and Coca-Cola.

2. Differentiated Marketing Strategy: - It contradicts the Undifferentiated

Marketing Strategy where the firm develops different products / services to
suit the need of varying groups which increases their marketing and
operational expenditures. E.g.: - Airline Industry.

3. Concentrated Marketing: - This is a “focused” approach of the firm to

target only one particular segment and create a niche market of that
particular segment. In other words instead of targeting a small share of a
large group, the company aims at a large share of a small group.
 MARKET SEGMENTATION OF THE SHOE
MARKET
There are two types of customers the store needs to attract: the Runners and
the Non-runners. These groups are subdivided in the following sections.

1. Runners
"True Runner" - Runs between 20 - 40 miles per week. This person is
generally between 30 - 45 years old, both male and female. This segment
may also include high school track and cross country runners. This person
wants the latest in technology, regardless of price. The True Runner would
be the running circuit's answer to the "computer freak." You may find
him/her running at 5:00 a.m. or 10:00 p.m., whenever it can be fit into
his/her schedule. The True Runner frequently runs in races throughout
Florida and may even travel further to combine races with social visits or
vacations. Generally, the True Runner is in the upper income brackets. There
are 6,000 families earning over $100,000 per year within three miles of the
proposed location.
"Weekend Warrior" - May run up to 20 - 25 miles per week, but most of
that is on Saturday and Sunday. A job or family restriction may not allow
running to be scheduled during the week. This segment includes males and
females between the ages of 25 - 35. This person is most frequently the
parent of a young family and is looking for quality and an affordable price.
The Weekend Warrior will run in local races. Typically, the Weekend
Warrior is in the upper-middle income bracket: often two spouses working,
with substantial disposable income. There are close to 12,000 families in this
income bracket within three miles of the proposed location.
"Running for Attention" - People in this segment run 6 - 10 miles per
week. He/she wants to look like a runner regardless of ability and will
frequently go to parks, the beach, and other highly visible places to run.
Most often is a single person looking to meet other singles. Interested in the
latest styles, but, he/she must look good. A person who is Running for
Attention purchases coordinated outfits and accessories, running bottles, and
timing watches. become an active runner in spurts, but not consistently
because he needs motivation. Typically, the Running for Need segment is
comprised of males between the ages of 18 - 30.
2. Non-runners
Infants - While not a high volume, the first pair of shoes for most infants is
an athletic style. The first pair of Nikes or Pumas can be a very proud
moment in a young family's development. Being able to properly measure
and fit an infant's foot is critical to developing a following in this market
segment. Credibility in the sales to the parents or older sibling will
determine if you receive to opportunity to serve the newest member of the
family. There are approximately 6,000 children below the age of five within
three miles of the proposed location.
Children - Possibly the most important segment other than adult running.
With approximately 20,000 potential customers, this group must be a
primary focus for any family business. Regardless of athletic level of
participation or interest, virtually every child has at least one pair of athletic
shoes. More often, children have several, depending on their preference of
sports or style. The importance of capturing this business is intensified based
upon the built-in obsolescence due to the growth of their feet. There are
approximately 17,500 children between 5 - 12 within three miles of the
proposed location.
Teens - This used to be the most important segment in athletic footwear. The
local teen boy and girl had to have the new Michael Jordan high-tops, at
$100, every eight months. Today, that need has diminished, but teens still
remain a critical element to a successful athletic shoe retailer. While it may
not be the "required" footwear in middle or high school, it remains a primary
asset of every teen's wardrobe. Due to their ever-present concern for being in
style, most Coral Springs teens still require name brand, in-style athletic
shoes in their stable of footwear. As well, every teen needs a pair for
practical use.
Adults/Non Participant - While some adults never participate in a sport,
almost all own a pair of athletic shoes. The non-participant adult may be the
most difficult segment to capture. The upper income adult will still want
name brand newer styles. The middle and lower income adults will look to
the discount department stores and "discount shoe warehouse" concepts for
practical athletic footwear. This customer is also less concerned about
customer service and the proper fit, since they are not as hard on their
athletic shoes and buy less frequently.
Target Market Segment Strategy

We will focus on two primary market segments:

The "Active Family" - The Active Family will be the focus of our non-
running marketing effort. They give us the largest target, most opportunity
for multiple sales, and allow us to gain further access into the community's
numerous leagues. A typical active family would be described as parents in
their late 30's and early 40's with two children. If the children each play two
sports, that would require a minimum of two pair of shoes per year, for each.
If the parents are also active, that could amount to an additional two pair per
year. With the need to purchase six pair of shoes per year, we expect this
family to make shoe purchases anywhere from three to six times during the
year. They may visit the store an additional three to four times for
accessories or simply to browse while in the center. For example, there are
13,000 participants in the Coral Springs Youth Soccer Program. Every one
of them needs a new pair of soccer cleats every year. Currently, they need to
leave Coral Springs to get a good selection of styles. This is a volume
customer, but our goal is that the entire family comes along for the ride, and
through service and knowledgeable sales help, an additional sale is
consummated. This average sale will be approximately $40.
The "True Runner/Weekend Warrior" - The next most important segments
will be the participant runner. The average sale for this customer will be
between $70 - $90. This customer should always make an additional
purchase when visiting. Running socks, running apparel, running
accessories, or supplements should be added to this ticket. By capturing the
True Runner, the less serious runner will be attracted to the store to be able
to associate with their more serious counterpart.

We anticipate that 70% of our annual volume will come from these two
classifications. The balance will be sport-specific buyers and non-family
participants.