The right target market

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One of the most important marketing functions for a firm is finding the right target market. A target market by definition is: "a group of consumers at whom the seller specifically aims its marketing efforts". Identification and selection of the target market is crucial for a firm's marketing strategy to be effective. In the process of finding the target market the first and probably the most crucial step is market segmentation.

Market segmentation in general is differentiating groups of people in the market, so that the firm may find similarities between certain groups and therefore construct a target market. Many companies' previously developing products for diverse markets have found that the resource draws unsustainable as consumer demand has dwindled. This has led to greater emphasis on defining the characteristics of accessible and financially viable consumer groups in order to target the unique benefits of an existing product portfolio and rationalize production and marketing costs in the process. The nature of service sector products facilitates product and market differentiation with enhanced opportunities for cost control and productivity gains. A good market segmentation program in effect saves the company resources and hits the market exactly where the company has