Monday, October 02, 2006

Management Lite & Ezy 8 – Market Targeting

In Management Lite & Ezy 7, I described segmenting consumer market. The next step a company does is to select one or more segments to enter. The targeted market segments should be substantial (large and profitable enough to server) and accessible (the segments can be effectively reached and served).

Derek F. Abell identified five patterns of target market selection:

Single Segment Concentration e.g. Porsche (sports car only, targeted at the rich and famous)

Selective Specialization e.g. Procter & Gamble personal care products (different products for different markets)

Product Specialization e.g. microscope (sold to different markets such as universities, government and commercial laboratories)

Market Specialization e.g. firms that sell assortment of products only to university laboratories

Full Market Coverage e.g. Coca-Cola

The diagrams illustrate these five patterns.

Note: P = Product, M = Market

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