Target Marketing: A Significant Strategy in Developing a Market Plan

One of the harder aspects of developing a marketing plan is to focus on target marketing.

Many small business owners want to sell to the whole market (the world so to speak) but unless you narrow your marketing using target marketing strategies, you will not be able to achieve the kind of success you want, and need, in selling your products or services.

Before you narrow in on your market, targeting the most attractive segments, you need to complete a market segmentation.

Segmenting your market involves identifying and profiling potential buyer groups - you want to understand why they are potential buyers for your product, what types of products they require, what their buying profiles look like.

From that segmenting, you will select the primary, secondary, and tertiary markets that you want to target (also known as target marketing).

Once you have your target marketing strategy in place, you will need to develop a market positioning (somewhat different from product positioning) strategy to develop awareness, understanding and acceptance of your product(s)'s features, advantages and benefits (also known as your product's unique value proposition) within your targeted market.

To target your market most effectively, you must assess your market segments by considering your objectives, your resources and the segment's attractiveness in relation to those considerations.

Once you have completed that assessment, complete your target marketing strategy by choosing best-fit targets, such as:

1. Single-segment concentration. Your business is focused on one segment of the market. For example, soccer balls, soccer shoes, soccer clothing, etc. - your business objectives are to become the largest soccer supplier in your geographic market and you have the resources to achieve those objectives. Because you are focusing on a single-segment or a narrow niche, your business will gain some economy from specialization (you may grow to be the largest customer of soccer ball manufacturers, etc.). That economy will help you bring value to your product and to your market. Be cautious with this strategy; as you are focusing on a single segment alone, you have increased risk if the segment collapses or if a stronger competitor enters the market.
2. Selective specialization. Your business focuses on a number of segments in the market - there is not necessarily any relationship between the segments however each segment has a high degree of value for your business objectives and resources. Because the segments can stand alone, the risk of failure is minimized by the diversification - the assumption is that at least one, or more, of your segments will be successful at any one time.
3. Product specialization. Your business focuses on one product that it sells to a number of segments. For example, a coffee distributor might sell coffee to a retail store chain, to a number of coffee shops, and even direct to the end consumer (through an online store). By expanding your market through product specialization you can build a very strong brand for your product and your business. The risk is on the product desirability itself - does the product have a long product life cycle or a short life-cycle. Be very aware of that and plan accordingly (for example, have new products in development and be ready to take them to market quickly).
4. Market specialization. Your business focuses on supplying many products to one market segment. For example, you might be supplying all types of sporting goods to sporting goods stores (e.g. soccer, tennis, snowboards, etc.). With this type of strategy, the business must focus on developing a strong reputation for service, quality, value and be respected for its knowledge of the industry. That type of reputation will allow the business to be a leader in its market and its customers will rely on your business to help introduce new products as necessary. This strategy is very dependent on the health of the industry and a specific customer group.
5. Total market coverage. Your business has many products and services many markets. This by definition means your business must be large to be capable of providing this type of coverage into the market. The costs for this type of target marketing approach is high: the business must have strong distribution channels, large resources, and many products. Small businesses should not attempt total market coverage.

In today's market environment, many businesses are going deeper into market targeting and focusing on niche marketing. A niche is a very narrowly defined market. Additionally, with today's technology, businesses are more able to do direct, one-to-one marketing where the marketing message can be customized to the specific, individual customer needs.

Competition in business today is so volatile and so targeted that to be successful in your small business you must focus on a target marketing approach.

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