Targeting

Question 1

Select viable segments

Answer 1

Organisations want to select viable segments – in other words, segments that will be profitable for them to target with their market offering. The segment’s needs and demands must also suit the organisation’s resources and skills and “match” its objectives, and not be too expensive to reach.

Question 2

Evaluation Criteria

Answer 2

Segment size and growth possibilities.
Attractiveness and potential profitability. Resources and skills of the organisation.
Compatibility with the organisation’s objectives.
Cost of reaching the target market.

Question 3

Segment size and growth possibilities.

Answer 3

For example, a segment that is too small to be profitable and does not show any growth potential should be ignored.

Question 4

Attractiveness and potential profitability.

Answer 4

An unattractive segment could be one that consists of hard-to-reach individuals or even people with unstable financial situations.

Question 5

Resources and skills of the organisation.

Answer 5

If the organisation does not have enough capital or salespeople to address the needs of the segment then it should be ignored.

Question 6

Compatibility with the organisation’s objectives.

Answer 6

If the segment does not have similar long-term objectives to the organisation, then the segment will not be viable. Segments that are only seeking low prices, for example, may not be in agreement with the organisation’s long-term profitability objectives.

Question 7

Cost of reaching the target market.

Answer 7

An organisation must determine whether the costs of reaching the particular segment are affordable. If the costs are too high, then the organisation will probably not select that particular segment.

Question 8

Three broad approaches to market targeting

Answer 8

undifferentiated, differentiated and concentrated marketing.

Question 9

undifferentiated

Answer 9

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Question 10

differentiated

Answer 10

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Question 11

concentrated marketing

Answer 11

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