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Targeting Strategy

This article covers meaning, importance & types of Targeting Strategy from marketing perspective

Published by MBA Skool Team in Marketing and Strategy Terms Last Updated: November 22, 2023Read time:

What is Targeting Strategy?

Targeting strategy is a strategy for selection of potential customers the company/ organization can sell its products/services to. Targeting is done to a specific target group as there are various segments in any market. Most firms do not select all the segments in a market to operate and choose one or few of the identified segments through targeting. As mentioned earlier, targeting is this process of selection made on the basis of attractiveness of the segment.

Importance of Targeting in Marketing

In marketing, STP marketing strategy is an important way of doing business, where its stands for market segmentation, targeting and positioning. Targeting is the processes of identifying the important target market and target audience which a company wants to sell its products to. Any product or service would not be of utility of every person. And hence companies must be focused on whom the want to target. A good targeting strategy helps a company have focused sales growth, enhanced promotional strategy, build strong customer loyalty etc. Hence, targeting strategy is the backbone for any marketing firm.

The select criteria useful for targeting in marketing are as follows:


After selection, a business/ organization that offers a wide range of products and services can decide whether to introduce a generic product (as in mass marketing) or launch different products for different segments (as in multi-segment marketing) based on the market segment’s needs and behavior.

Types of Targeting Strategies in Marketing

Some of the important targeting types used by a marketer in marketing are as follows:

1. Niche/ Concentrated marketing: Sometimes there could be very small but highly profitable market segment which cannot accommodate more than a few players. A company may choose to operate in such a well-defined group of customers by targeting them. The idea is to gain expertise in meeting the highly specialized customer needs. For example, Sensodyne is a toothpaste for consumers with sensitive teeth. The consumer segment is small but has very specific requirements.

2. Mass/undifferentiated marketing: The idea is to sell the same generic product to all consumers. Such an idea assumes that the consumers have similar needs with respect to the particular product category and hence targeting is done to a larger customer base. The main advantage is low cost as a result of economies of scale. For example, Tata iodized salt.

3. Selective/ differentiated marketing: A company may opt to provide different offerings to different consumer segments. A company can differentiate its product through the following ways to have focused targeting:

a. Product differentiation (features, durability, performance, style) e.g. Apple iPhone 5 & 5c

b. Services differentiation e.g. Kingfisher Airlines’ in-flight services

c. Personnel differentiation e.g. Customer service at Pizza Hut

d. Image differentiation e.g. Zara (fast fashion, trendy)

Advantages of Targeting Strategy in Marketing

Targeting the right set of customers is critical for any business. Some of the important advantages of targeting in marketing are:

1. Targeting helps a company to use its resources wisely.

2. It helps in ensuring a strong focus towards the right set of customers.

3. Targeting strategy in marketing gives the employees a sense of direction where they can channelize their energies.

4. It helps how customers look at its brand when compared to competitors.

5. Targeting helps companies avoid redundant costs on customers who would not be a target audience for the product or service.

Hence, this concludes the definition of Targeting Strategy along with its overview.

This article has been researched & authored by the Business Concepts Team which comprises of MBA students, management professionals, and industry experts. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

Browse the definition and meaning of more similar terms. The Management Dictionary covers over 1800 business concepts from 5 categories.

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