Selecting Target Market Segments

After evaluating different segments, the company must decide which and how many segments it will target. A target market consists of a set of buyers who share common needs or characteristics that the company decides to serve. Market targeting can be carried out at several different levels. ^Figure 7.2 shows that companies can target very broadly (undifferentiated marketing), very narrowly (micromarketing), or somewhere in between (differentiated or concentrated marketing).

Undifferentiated Marketing

Using an undifferentiated marketing (or mass-marketing) strategy, a firm might decide to ignore market segment differences and target the whole market with one offer. This mass-marketing strategy focuses on what is common in the needs of consumers rather than

Author I Now that we've divided Comment | ^g marke1: ¡nto segments, it's time to answer that first seemingly simple marketing strategy question we raised in Figure 7.1: Which customers will the company serve?

Target market

A set of buyers sharing common needs or characteristics that the company decides to serve.

Undifferentiated (mass) marketing

A market-coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer.

Marketing Targeting Strategies

This figure covers a pretty broad range of targeting strategies, from mass marketing (virtually no targeting) to individual marketing (customizing products and programs to individual customers). An example of Individual marketing: At myMMs.com you can order a batch of M&Ms with your face and personal message printed on each little candy.

Differentiated (segmented) marketing

Differentiated (segmented) marketing

Concentrated (niche) marketing

Micromarketing (local or individual marketing)

Targeting broadly

Targeting narrowly

Differentiated (segmented) marketing

A market-coverage strategy in which a firm decides to target several market segments and designs separate offers for each.

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Wrarçler jfm^wm on what is different. The company designs a product and a marketing program that will appeal to the largest number of buyers.

As noted earlier in the chapter, most modern marketers have strong doubts about this strategy. Difficulties arise in developing a product or brand that will satisfy all consumers. Moreover, mass marketers often have trouble competing with more-focused firms that do a better job of satisfying the needs of specific segments and niches.

Differentiated Marketing

Using a differentiated marketing (or segmented marketing) strategy, a firm decides to target several market segments and designs separate offers for each. General Motors tries to produce a car for every "purse, purpose, and personality." Procter & Gamble markets six different laundry detergent brands, which compete with each other on supermarket shelves. AAnd VF Corporation offers a closet full of more than 30 premium lifestyle brands, each of which "taps into consumer aspirations to fashion, status, and well-being" in a well-defined segment.18

VF is the [America's] number-one jeans maker, with brands such as Lee, Riders, Rustler, and Wrangler. But jeans are not the only focus for VF. The company's brands are carefully separated into five major segments—Jeanswear, Imagewear (workwear), Outdoor, Sportswear, and Contemporary Brands. The North Face, part of the Outdoor unit, offers top-of-the-line gear and apparel for diehard outdoor enthusiasts, especially those who prefer cold weather activities. From the Sportswear unit, Nautica focuses on people who enjoy high-end casual apparel inspired by sailing and the sea. Vans began as a skate shoe maker, and Reef features surf-inspired footwear and apparel. In the Contemporary Brands unit, Lucy features upscale activewear, whereas 7 for All Mankind supplies premium denim and accessories sold in boutiques and high-end department stores such as Saks and Nordstrom. At the other end of the spectrum,

Sentinel, part of the Imagewear unit, markets uniforms for security officers.

By offering product and marketing variations to segments, companies hope for higher sales and a stronger position within each market segment. Developing a stronger position within several segments creates more total sales than undifferentiated marketing across all segments. VF Coporation's combined brands give it a much greater, more stable market share than any single brand could. Similarly, Procter & Gamble's multiple detergent brands capture four times the market share of nearest rival Unilever (see Real Marketing 7.1).

But differentiated marketing also increases the costs of doing business. A firm usually finds it more expensive to develop and produce, say, 10 units of 10 different products than 100 units of one product. Developing separate marketing plans for the separate segments requires extra marketing research, forecasting, sales analysis, promotion

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