Determining Which Segments Offer Potential

second step in selecting a market involves determining the most attractive segment. The firm must examine the sales potential of the segment, the opportunities for growth, the competition, and its own ability to compete. Then it must decide whether it can market to this group. Stories abound of companies that have entered new markets only to find their lack of resources or expertise would not allow them to compete successfully. For example, Royal Crown (RC) Cola has often been quite successful in identifying new segment opportunities but because of limited resources has been less able to capitalize on them than Coke and Pepsi. RC was the first to bring to market diet colas and caffeine-free colas, but it has not been able to establish itself as a market leader in either market. After selecting the segments to target and determining that it can compete, the firm proceeds to the final step in Figure 2-2: the market positioning phase.

Exhibit 2-11 Maxwell Business Systems pursues a concentrated marketing strategy with JAMIS

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