Markets and Target Markets

We defined market here as people or organizations with needs to satisfy, money to spend, and the willingnes to spend it. Within the same general market, there are groups of customers with different needs, different buying preferences, or product-use behavior. Not all customer who wear pants want to wear jeans. Not all firms the use computers want the same amount of memory or speed. The group of customers (people or organizations) for whom the seller designs a particular marketing mix is a target market.

Target Market Strategies.

There are two altenatif of target market strategies. One alternative is to threat the total market as a single unit-as one mass agregat market.Everyone in the market can be adequately satisfied with one marketing mix. This is sometimes called as a ‘shotgun’ approach (one program, broad market).

With the other alternative, the total market is viewed as consisting of several segment with differences significant enough that one marketing mix will not satisfy everyone or even a majority of the market. Therefore one or more submarket are selected as target market.

Market Segmentation.

Market segmentation is a process of identifying, describing and dividing market before select it as target market. In segmenting we first identify the needs of customers within a submarket and than decide if it is practical to develop a marketing mix to satisfy those needs.

The goal of segmentations is to divide a market so that each segment respond to a different or unique marketing mix. Three conditions help marketers move toward this goal:

• The basis for segmenting must be measurable, and data describing the characteristic must be obtainable. The age of customers is both measurable and obtainable.
• The market segment should be accessible through existing marketing institutions (middlemen, advertising media, company sales force) with a minimum of cost and wasted effort.
• The market segment should be large enough to be profitable. In concept, management could treat each single customer as a separate segment.

A company can segment its market in many different way. And the bases for segmentation vary from one product to another. However, the firs step is to divide a potential market into two broad categories: ultimate consumers and business users. The sole criterion for this segmentation is the customer’s reason for buying.

Ultimate Customers buy goods or services for their own personal or household use and are satisfying strictly nonbusiness wants. They commonly called the consumer market.

Business users are business, industrial, or institutional organizations that buy goods or services to use in their own organizations, to resell, or to make other products. They constitute the business market.

Segmenting markets into two above groups is significant from marketing point of view because the two segment buy differently. Consequently the marketing mix-product, distribution, pricing, and promotion-will depend on whether it is directed toward the consumer market or the business market.