Feature Article : "The views expressed here are those of the authors and do not necessarily represent or reflect the views of Modernghana.com."

A company identifies or singles out groups of customers for its products and directs some or all of its marketing activities at them.

It develops and maintains a marketing mix, consisting of a product, a distribution system, promotion and price that effectively meet customers' needs.

People have given different kinds of definitions to the word 'market'. There are those who refer to it as a specific location where products are bought and sold. A large geographic area may also be termed a market. 'Market' is seldom referred to as the relationship between demand and supply of a specific product.

One can, for example, ask one's friend, "How is the market for maize in Techiman?" "Oh, it is doing quite ok," or as the case may be. There are other cases where 'market' is used to mean the act of selling.

According to Kumar and Meenakshi, a target market is a group of people or organizations for which a company designs, implements, and maintains a marketing mix intended to meet the needs of the group, resulting in mutual beneficial and satisfying exchanges.

From this definition, it might be understood that there is no company in this competitive world that can be proud of serving all customers in a broad market such as newspapers or computers.

The compelling reason is that customers are too numerous and diverse in their buying requirements. As a result of this, every customer-oriented company consciously has to identify its market segments, which it can effectively serve. To them, segmentation involves identification of groups of individuals or organizations that have significant implications for determination of a marketing strategy. It is about dividing a diverse market into a smaller, more similar submarkets.

You know the objective? It is aimed at identifying groups of customers with similar requirements, so that they can be served effectively while being of a sufficient size for the product to be supplied efficiently. It is the basis by which marketers understand their markets and develop strategies for serving their chosen customers better than competition.

A very important thing that marketers and marketing students need to understand is that segmentation provides the basis for selection of target markets. And so we will say that a target market is a chosen segment of the market which a marketer or company has decided to serve.

These customers in the target market have similar characteristics and so a single marketing mix will thus be used to serve them. Therefore, creative segmentation may result in the identification of new segments that are not being served presently and may form attractive targets.

In this sophisticated marketing environment, many companies are embracing target marketing. Sellers distinguish the major market segments, target one or more of these segments, and develop products and marketing programmes tailored to each. According to Kotler, instead of scattering market effort (a 'shotgun' approach), they focus on the buyers that have the greatest chance of satisfying (a 'rifle' approach).

Types of Markets

Markets fall into one of two categories – consumer markets and organizational or industrial markets. These categories are, however, based on the characteristics of the individuals and groups that make up a specific market and the purpose for which they buy products.

Pride and Ferrell explain that a consumer market consists of purchasers and/or individuals in their households who intend to consume or benefit from the purchased products and who do not buy the products for the main purpose of making profit. You can trust that each of us belongs to numerous consumer markets.

An organizational or industrial market, on the other hand, consists of individuals or groups of people who purchase a specific kind of product for one of the following purposes:

resale

direct use in producing other products, or

use in general daily operations.

For example, a publishing company that buys paper reels and ink to use in the production of newspapers or books is a part of the industrial market for paper reels and ink.

This same firm purchases disinfectants to clean its office areas. Although the disinfectants are not used in the direct production of newspapers or books, they are used in the operations of the firm; thus, this publishing house is part of the industrial market for disinfectants.  Continued    Source: DAILY GRAPHIC - Daily Graphic

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