market-scope strategy

A market strategy under which a company may either choose to segment the market or to pursue a single-market strategy. Market-scope strategy thus specifically amounts to identification of the bases for forming market segments or establishing criteria for segmentation, and choosing to serve a single market, several distinct markets, or the entire market.
 
(1) Single-market strategy: A variety of reasons may lead a company to concentrate its efforts on a single segment. For example, a small company, in order to avoid confrontation with large competitors' may find a unique niche in the market and devote its energies to serving this market.
 
A single-market strategy often affects profitability in a positive manner. Due to concentrated effort in a market, particularly when competition is meager, It is feasible to keep costs down while prices are kept high, and thus earn substantially higher profits. Although the growth objective may not be achieved when this strategy is followed, a company may be able to increase its market share if the chosen segment is large enough vis-?-vis the overall market.
 
(2) Multi-market Strategy: Instead of limiting business to one segment, a company may opt to serve several distinct segments. To successfully implement the multi-market strategy, it is necessary to choose those segments with which the company feels most comfortable and in which the company is able to avoid confronting companies serving the entire market.
 
The multi-market strategy can be executed in one of two ways: either by selling different products in different segments, or by distributing the same product in a number of segments.
 
(3) Total-market strategy: A company using the total-market strategy serves the entire spectrum of the market by selling different products directed toward different segments in the market. The strategy evolves over a great number of years of operations. Initially a company may start with a single product to serve the market. As the market grows and gets into different segments, leading competitors may attempt to compete in all the segments. This may be done by employing different combinations of product, price, promotion, and distribution strategies. These dominant companies may also attempt to enter new segments as they emerge. As a matter of fact, the leading companies may themselves create new segments and try to control them at the outset.
 
The total-market strategy is highly risky. For this reason only a very small number of companies in an industry may follow this strategy. It requires a top-management commitment to embracing the entire market. Additionally, a company needs an ample amount of resources to implement this strategy. Finally, only companies in a strong financial position may find this strategy attractive. As a matter of fact, a deteriorating financial position may force a company to move backward from across-the-board market strategy.
 
The total-market strategy can be highly rewarding in terms of achieving growth and market share. It may or may not lead to increased profitability.