Marketing Study Notes
What is a target market?
A target market is a market segment that has been deliberately selected by an organization in order to focus their marketing efforts and offerings.
Why is target market selection important?
- Target market selection is the second major phase of the STP process.
- It is important because it is a key marketing strategy decision.
- The choice of a target market allows the firm to focus its marketing efforts and match its offering to the needs of that segment.
- Firms should select target markets where they can compete successfully.
How are target markets selected?
Usually target markets are selected using a mix of the following evaluation criteria:
- Size of the segment (sales)
- Segment growth rate
- Profit margins
- Competitive rivalry
- Access to distribution channels (available to the firm)
- Importance of brand equity (and whether the firm has strong brands)
- Firm’s strategic direction
- Firm’s growth goals
- Firm’s resources to compete in the potential target market
The STP process (study notes)
The market segmentation evaluation criteria (study notes)
Target market selection (study notes)