• It may be costly to develop a target market. E.g. There is a need to regularly conduct primary research to determine who buys BMW products, especially when servicing regional or national markets or as in the case of Malaysia, a small and competitive non-national premium car market.
• There is the risk that you might be wrong about who your customer is. Just because a target group is well-defined does not necessarily mean that is the right group to aim for. If you narrow your focus too far, you may actually be missing potential customers in a group you haven't thought of. Marketers should be prepared to change their strategies if you find a target market is not responding the way you predicted it would.
• As hinted above, target marketing may overlook secondary customers, which means that BMW may potentially lose significant sales.
• Limited growth potential. Marketing to a targeted segment of customers may have limits because you can only grow so far. Beyond that, you will need to either identify new target markets or find a way to appeal to the broader market.