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Target Market Selection

Target market selection is the next stage after market segmentation. After the markets have been identified, analyzed, and segmented, the most suitable segment or segments need to be targeted. The company needs to look at the size of the segment, how fast is it growing, the level of competition amongst existing companies and the existing brand loyalty of the consumers, whether the sales are enough to break even, the total sales potential of the segment and the level of profits that are expected in this segment.

In order to determine this, companies will need to use detailed market research and analysis to obtain the relevant information. This requires detailed surveys of buyer intentions, marketing tests, and statistical analysis of existing demand and supply. It must be noted that larger and more profitable segments attract more competition from larger firms. Alternatively, the company can use a specific competitive and technological advantage to target a smaller segment and ensure high profits.

Target audiences can be attracted by product differentiation and by-product branding. A company that wants to enter into a market and grab a good customer share will first have to identify an issue the market is facing, which the other companies are not able to solve and come up with a solution. Simply making an entry into the market when all the needs of the consumers are fulfilled by other companies will yield not much. So, introducing a new feature into the product will make a differentiation of the product from other products which makes it easily recognizable.

Branding is another way to attract potential customers. Branding is simply creating an image for the product. Often the product and the brand are used synonymously. Like, instead of saying Photocopying we say Xeroxing. The name of the product itself will denote the product. This will automatically attract customers. And this is called branding.

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