What follows segmentation?

We can define targeting as a two stage process – evaluating the market segments and deciding on the targeting strategy to deploy as a result of our analysis. How attractive a market segment is will depend on several factors that we will explore later. However, just because a market is attractive, does not mean that it will be automatically at the top of the list of targets. The capabilities a company has to deliver to the chosen segment must meet the needs of that market. For example, a small company looking to bid for large government contracts may not have the resources to fulfil its obligations

Targeting is driven by the need to be focussed in your efforts when attracting customers. Very few companies operate in markets with no other competitors (Blue oceans). Most companies operate in crowded marketplaces (Red oceans) where differentiation between the suppliers is exceedingly small and continuously threatened by new entrants as the barriers to entry are low.