Market Selection
This article covers meaning, parameters, process & example of Market Selection from marketing perspective.
What is Market Selection?
Market Selection is the process of deciding which markets to invest in and pursuing. It is important for a business to have a strong process to identify & select the right market for their business. Because of good market selection, a business can reach out to its desired target audience and prosper in its business.
One of the major criteria to be kept in mind while doing a market selection is the growth potential of the market i.e. what is the potential for a company’s revenue to grow by investing in a particular market. Another thing to be kept in mind for market selection are the marketing objectives i.e. the goal of entering a particular market, say increase in revenue by 5%. It is also important to determine parameters other than growth potential like market size for market selection.
Market Selection Process
Market selection process can be done in the following steps:
1. Determine the objectives or goals of market selection
2. Determine the parameters to be used for market selection
3. Do a preliminary screening of the market
4. Do a detailed investigation of this screening and short list the best fit
5. Evaluate the shortlisted markets and select one or two
Parameters for Market Selection
The parameters for market selection can either be firm related, i.e. dependent highly on your company say your business strategy and objectives, market related i.e. the given market environment, say the demand, supply, competition, distribution channels available etc. or some general environmental factors that play a key role in selecting a market for example the economic policy of the country, business regulations, currency stability, ethnic and political factors, infrastructure, bureaucracy etc.
Example of Market Selection
For example, you want to launch an old brand of chocolate in a new market, consider the questions you will ask yourself before selecting a particular market. One obviously would be would your sales grow i.e. is there enough demand for chocolates in the market? Once you’ve decided that there seems to be a prediction of a fair market growth, you ask yourself the share you want to have of the market, i.e. your goal of entering the market – say achieving a target of 100 SKUs in the first week. You may also test the market by releasing a few chocolate bars and checking the number sold and the acceptance or liking of it. You can then select the market that portrays the maximum acceptance and hence maximum growth potential.
Hence, this concludes the definition of Market Selection along with its overview.
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