A target opportunity exists when the opportunity to enter a given market is compatible with your company’s mission statement and core competencies.
For example, Chuck Pillsbury’s expertise in milling flour led to an opportunity to enter and dominate the Boxed Cake Mix market.
Continuous monitoring of the marketing environment, allows you to divide the entire pool of consumers into homogeneous groups of potential customers – or target markets. Market segmentation is the process of dividing an entire market into segments. By evaluating these segments, you can refine your marketing mix to most effectively attract your target market.
In defining an effective marketing strategy, there are several characteristics that must be considered:
Demographic segmentation is based on variables such as age, gender, education, occupation, income and Geographic location.
NOTE: Sometimes Geographics may be used as a single segmentation criteria.
Psychographic segmentation is based on variables such as lifestyles, values and traits.
A psychographic segmentation strategy typically considers the target market’s wants needs opinions and attitudes. Influences such as career, hobbies, and cultural influences should also be considered.
You may occasionally want to segment your market according to the relationship that consumers have with the product. Are they frequent users? What benefit do they receive from the product? If the target market is brand loyal, they may also buy related merchandise based upon that loyalty.
For example, Nike doesn’t just sell shoes…
The process of segmenting the market
Identify the market segments
Choosing the correct segmentation method is based on understanding the product. Who’s going to buy this thing? If we’re marketing snow blowers, Geographics may be the basis of our overall strategy.
Analyze each segment
Once a segment has been identified, it’s important to look closer at the people who make up that segment. Outline the purchasing habits, the attitudes and lifestyle that makes up a typical member of the group. You may want to develop a Consumer Profile at this point.
Evaluate the opportunities
Consumer profiles help identify the market segment that is best suited to help achieve the company’s goals and objectives. After considering your ability to reach a given market, look for the most opportune moment to get your message to them.
Select a target market
This is self-explanatory.