Outline of the target market selection evaluation criteria
Target markets should be evaluated on:
Financial Issues
- Segment size
- Segment growth rate
- Profit margins
Structural Attractiveness
- Competitors (direct and indirect)
- Competitive rivalry
- Access to distribution channels
- Current channel relationships
Strategic Direction
- Fit with the firm’s strategic future
- Growth expectations
- Marketing Expertise
Resources (financial position and staff resources)
- Capability (to develop products and compete)
- Importance of brand equity (ability to leverage, dilution concerns)
Opportunity Cost
- Are other growth options more attractive?
The target market selection process
- Starts with the market segment profiles
- Assesses the market segment against the criteria/evaluation checklist (listed above)
- Usually scores/rates each segment will against the assessment items in the checklist
- Some firms may considers the importance of each factor (and assign a weighting)
- Then a final overall assessment is generated
- Appropriate target markets are then selected
Related Topics
Study Notes for Target Markets
