Chapter6 Flashcards
Market Segmentation
The process of dividing a broad target group into clearly identifiable subsets of consumers who have common needs wants and/or demands and who will respond in virtually the same way based on a particular marketing mix
Target Marketing
-The process of deciding which segment(s) to pursue
-It means that the marketer develops a specific marketing mix to meet the needs of a specific group of customers
Product positioning
-The creation of a specific image/perception of the product by consumers in a selected target market
Positioning relates to how the organisation wants to compare the new item in terms of its predecessors
The 8 stages in the segmentation, targeting, and positioning process
Stage 1:
Situation analysis
Stage 2:
Market segmentation
Stage 3:
Profiling
Stage 4:
Market targeting
Stage 5:
Selection
Stage 6:
Product positioning
Stage 7:
Positioning strategy
Stage 8:
Marketing mix
Stage 1: Situation analysis
Determine where the organisation stands regarding objectives, strengths and weaknesses
Stage 2: Market segmentation
Select the important variables that’ll be used for segmentation
Stage 3: Profiling
Profile each segment based on an important variables
Stage 4: Market targeting
Determine the attractiveness of each segment
Stage 5: Selection
Select the most attractive target market(s)
Stage 6: Product Positioning
Identify the positioning to be used in each segment
Stage 7:Positioning strategy
Select and develop the right positioning strategy for each segment
Stage 8: Marketing mix
Develop and implement the marketing mix strategy for each segment
Benefits of market segmentation
-It compels marketers to focus more accurately on customer needs in order to achieve a greater degree of customer satisfaction
-It leads to the identification of excellent new opportunities if research on an unexplored segment
-It provides guidelines for the development of separate market offerings and strategies for various market segments
-it can help guide the proper allocation of marketing resources
Disadvantages of market segmentation
T-O-E
-The development and marketing of separate models and offerings is very expensive
-Only limited market coverage is achieved
-Excessive differentiation of the basic product eventually leads to a proliferation of models and variations and finally to cannibalisation
Five Criteria for Effective Segmentation
-A segment should be measurable and identifiable
-It should be accessible
-It should be substantial and lead to segments that are worthwhile serving
-It should be meaningful,
Bases used to segment consumer markets
It could be based on : LV
-Level of marketing segmentation
-Variables in segmentation
Market segmentation can take place on 4 levels
M-M-N-S
-Micro marketing
-Mass marketing
-Niche marketing
-Segment marketing
Variables in segmentation
-Geographic
-Demographic
-Psychographic
-Behavioural
Geographic Segmentation
-Dividing the total market into different geographical areas
-The business can decide to target only one or a limited number of geographical areas
Demographics segmentation
-It involves dividing the market according to a combination of factors
