Factors Affecting the Target Market Segment

Regardless of how segmentation is incorporated into marketing activities, experienced marketer usually execute segmentation to enable him provide higher values to his potential customers. He will be able to know which specific customers he is serving and will be able to address their needs and concerns.

After segmentation, what the marketer needs to do next is targeting his efforts and focuses on the identified market segments. He will create a marketing campaign that will fulfill the needs as well as the market condition of his targeted market group.

Target market segment are affected by two salient factors:
1. How suitable the segment is to the product manufacturer objectives, resources as well as capabilities and
2. How attractive the target market segment is.

In determining the suitability of the segment to the manufacturer, the marketer needs

– to ensure that the product manufacturer will be able to provide superior values than competitors to the customers.

– To evaluate the impact of serving the segment with respect to the manufacturer reputation and dignity.

– To access the distribution channels that will serve the targeted market sections.

– To determine the capital buoyancy of the manufacturer to serve the market group.

And in determining the attractiveness of the target market section, the marketer will have to evaluate

– the percentage number of the customers with respect to the broad market (size of the segments) that will be served.

– Sales potential for the product manufacturer in the segment.

– Profit margin expected from the segment.

– Growth rate and competition in the segment.

– Required market share to break even

– Attainable market share when promotional budgets and expenditures of the competitors are provided.

– Loyalty of the existing customers in the segment.

An experienced marketer would know that satisfying the broad market is tasking and not profitable at all. In fact it will be less stressful and more profitable if just a smaller market segment where there is little or no competition is concentrated on. This also gives the manufacturer the opportunity to develop their products to have a greater advantage over competitors.