Marketing Management, Millenium Edition - epiheirimatikotita.gr

Market Targeting Strategies 155MARKET TARGETING STRATEGIESOnce the firm has identified its market-segment opportunities, it is ready to initiatemarket targeting. Here, marketers evaluate each segment to determine how many andwhich ones to target and enter.Evaluating Market SegmentsIn evaluating different market segments, the firm must look at two factors: (1) the segment’soverall attractiveness, and (2) the company’s objectives and resources. First, thefirm must ask whether a potential segment has the characteristics that make it generallyattractive, such as size, growth, profitability, scale economies, and low risk.Second, the firm must consider whether investing in the segment makes sensegiven the firm’s objectives and resources. Some attractive segments could be dismissedbecause they do not mesh with the company’s long-run objectives; some should be dismissedif the company lacks one or more of the competences needed to offer superiorvalue.Selecting and Entering Market SegmentsHaving evaluated different segments, the company can consider five patterns of targetmarket selection, as shown in Figure 3-7.Single-Segment ConcentrationMany companies concentrate on a single segment: Volkswagen, for example, concentrateson the small-car market, while Porsche concentrates on the sports car market.Through concentrated marketing, the firm gains a thorough understanding of thesegment’s needs and achieves a strong market presence. Furthermore, the firm enjoysoperating economies by specializing its production, distribution, and promotion; if itattains segment leadership, it can earn a high return on its investment.However, concentrated marketing involves higher than normal risks if the segmentturns sour because of changes in buying patterns or new competition. For thesereasons, many companies prefer to operate in more than one segment.Selective SpecializationHere the firm selects a number of segments, each objectively attractive and appropriate.There may be little or no synergy among the segments, but each segmentFigure 3-7Five Patterns of Target Market Selection