STP PROCESS / SEGMENTATING, TARGETING, POSITIONING : (Part 2) - TARGETING - TARGET MARKET (PASAR)

Summary

In this video, the concept of 'target market' is discussed following the previous topic of market segmentation. Targeting involves evaluating the appeal of each market segment and selecting one or more segments to focus on. The benefits of a clear target market include increased sales, efficient marketing, competitive advantage, cost-effective promotional strategies, and improved customer communication. The video also explains different targeting strategies, such as single-segment concentration, multi-segment marketing, and full-market coverage, and emphasizes the importance of evaluating segments based on size, growth, and resources before choosing the right target market.

Takeaways

• 😀 Target market is the group a company focuses on after segmenting the broader market into smaller, more specific segments.
• 😀 The process of targeting follows segmentation, where businesses evaluate each segment's potential before choosing which one to focus on.
• 😀 Focusing on a target market helps increase sales by enabling businesses to design products faster and market them more effectively.
• 😀 By defining a target market, companies can allocate marketing resources more efficiently and avoid wasted efforts on a broad audience.
• 😀 Targeting allows businesses to anticipate competition and create unique products that competitors may not offer.
• 😀 Target market strategies help businesses design more effective promotions tailored to the audience's preferences, enhancing sales potential.
• 😀 Knowing the target market helps businesses understand customer needs and communicate more precisely, leading to better customer relationships.
• 😀 Evaluating target market segments involves considering the size, growth rate, and profitability of the segment.
• 😀 Structural attractiveness of a segment, including competition and buyer power, is a critical factor when selecting a target market.
• 😀 The company's resources (e.g., skilled labor, capital) should align with the selected target market to ensure successful product offerings.
• 😀 Different strategies like single segment concentration, multisegment marketing, and full market coverage offer various ways to target and serve markets effectively.

Q & A

What is the definition of Target Market (Targeting) in marketing?

Target market, or targeting, is the process of evaluating the activity and attractiveness of each market segment and choosing one or more segments to enter. It involves selecting a specific group of customers from identified market segments to focus marketing efforts on.

What is the relationship between Target Market and Segmentation?

Target market selection comes after segmentation. Segmentation divides a heterogeneous market into homogeneous groups, and targeting involves choosing the most suitable segment(s) for a company's products and marketing efforts.

What are some benefits of focusing on a Target Market?

Focusing on a target market allows a company to increase sales, develop products faster, improve customer loyalty, optimize marketing budgets, anticipate competition, and improve promotional strategies.

Why is customer loyalty crucial for a business?

Customer loyalty is vital because 65% of a company's profits come from repeat customers. Loyal customers also help a business identify products that best suit market needs, ensuring better sales and sustained success.

What factors should a company evaluate when selecting a target market?

A company should evaluate the size and growth potential of a segment, the structural attractiveness of the segment (such as competition or substitutes), and whether the company has the resources and skills to serve the segment effectively.

What is Single Segment Concentration in Target Market strategy?

Single segment concentration is a strategy where a company focuses on one specific market segment. By concentrating on one segment, the company can develop a strong market position and potentially achieve higher profits.

How does Multi-Segment Marketing differ from Single Segment Concentration?

Multi-segment marketing involves targeting two or more segments, while single segment concentration focuses on just one. The benefit of multi-segment marketing includes larger market coverage and economies of scale.

What is Selective Specialization in Target Market strategy?

Selective specialization involves a company selectively targeting a few market segments, even if they are unrelated. The aim is to maximize profitability while minimizing risk by focusing on segments that offer the most strategic value.

What risks are associated with Product Specialization?

Product specialization focuses on creating a specific product or product line. The risks include shortages of materials, delays in production, and challenges related to technology changes that could affect the company's market position.

What is Full Market Coverage, and which companies are suited for it?

Full market coverage is a strategy where a company serves all market segments with a variety of products. This strategy is suitable for large companies that can afford the costs of covering a broad market and offering differentiated products.