Evaluating and selecting the target market

The firm must look into 2 factors

There are 5 patterns of target market selection

Segments overall attractiveness Companys objectives and resources

Single segment concentration Selective specialization Product specialization Market specialization Full Market Coverage

Single segment concentration

M1 P1

M2

M3

P2

P3

The firm gains a strong Knowledge of the segments needs and achieves a strong market presence. Firm specializes in production, distribution and promotion so enjoys operating economies. Risk involved is that a particular Segment may turn sour

Selective Specialization
M1 P1 M2 M3 Firm selects a number of each objectively attractive and appropriate, each promises to be a money maker There is an advantage of diversifying a firms risk

P2

P3

Product Specialization

P1

M1

M2

M3

P2

P3

Market Specialization
M1 P1 M2 M3

P2

P3

Firm concentrates on serving many needs of a particular customer group. e.g. microscope to universities only

Full Market Coverage

M1 P1 M2 M3

P2

P3

Firm attempts to serve all the customer groups with all the products they might need e.g. Coca Cola