Final answer:
The statement is false; a company's total market is all potential consumers, whereas the target market is a specific segment that the company focuses on. Microsoft's smaller market share in the broader computer software market, compared to the operating system market, exemplifies the difference.
Step-by-step explanation:
The statement, A company sometimes defines a total market as its target market, is False. The 'total market' for a product or service includes all potential consumers who might buy a product or service, whereas the 'target market' is a more specific segment of the total market that a company aims to reach with its products, services, and marketing efforts. The total market is broadly defined and could consist of various types of consumers with different needs and preferences, while a target market is usually more narrowly defined based on factors such as demographics, interests, or purchasing behavior.
Take Microsoft as an example. In the early 2000s, Microsoft had a dominant share of the computer operating systems software market. However, when considering the total market for all computer software and services, including games and scientific programs, Microsoft's share was significantly smaller, around 14% in 2014. This illustrates how a narrowly defined market can make a company appear to have a higher market concentration than when the market is defined broadly.
Similarly, companies like Greyhound and DeBeers might have a significant share in narrowly defined markets (like intercity bus transportation or diamonds, respectively) but they compete in broader markets (like intercity transportation or precious gemstones and jewelry) where their market share is smaller.