The characteristics of both – Target market and Strategic market are different. Hence, when our readers ask us the difference of Target market vs strategic market, than we answer with the point of view of the management of the company. Within the current market, the population which you want to target is known as target market. The focus of the company remains on the target market.
The target market is within the present market where the company is operating and a major challenge for a company is conquering and penetrating the target market. Thus, Honda motorcycles might be present in Mumbai, but now its target market is South Mumbai which may not be showing higher sales.
What is Strategic market
It is a market which you are interested in and you will probably enter when you have the resources to manage that market or when your target market is completely penetrated and saturated. In the above Honda example, Honda might move to Mumbai suburbs after it has conquered south Mumbai. Thus, the suburbs was the strategic market when south Mumbai was the target market.
Once the target market is penetrated, company might concentrate on the strategic market. The strategic market than subsequently takes over as the target market and the company will find a new strategic market.
It is not necessary that a firm is always able to expand to the strategic market. The strategic market might lose value or the firm might not build up enough resources to enter the strategic market. In such cases, the firm has to keep concentrating on target market or think of a different strategic market.
Key criteria differentiating the target market and strategic market are the following,
Pricing – Pricing can be the differentiator for target market and strategic market. Where a products pricing is high for target market, it can be lowered so that the company is able to penetrate the strategic market.
Place – Place is one major component in target market vs strategic market. Target market involves a geography where the product or company is currently operating. A strategic market however denotes a place where the company would like to expand to in the future. Thus many companies who are currently manufacturing products in India will look at foreign locations where they want to expand as their strategic market.
Promotions – Promotions are always made keeping the target market in mind and never for the strategic market. Once a company decides to penetrate a strategic market, that’s when it changes its promotional strategy.
If you look at it from a sales angle, only the national sales manager and the national marketing manager might be involved in the strategic market. However, all positions below the national sales manager, like the regional sales manager and area managers, will concentrate on the current target market.
Thus, there are numerous differences between a target market and a strategic market. When you have a target market in hand, it is necessary that you keep developing a strategic market as well.