The company has three market-coverage strategies available to it in selecting target markets. A company adopting an undifferentiated marketing strategy would ignore differences between market segments, and approach the market as a whole with one market offer. This strategy focuses on common buyer needs rather than what is different, and is designed to appeal to the largest number of buyers. Such a strategy provides cost economies, but difficulties can arise in the development of a product or brand that can satisfy all buyers. Differentiated marketing, a company utilising a differentiated marketing strategy targets several market segments, with separate marketing mixes for each segment. Differentiated marketing has become increasingly popular with companies.
Market Segmentation: Why market Segments Are Important
It must be possible to planning reach and serve the segment. The segments must be large or profitable enough. The segments must be suitable for the design of effective marketing mix programs. Target Marketing, market segmentation conducted by the company would reveal the various segments the companys market consists. The company now has to select which segment(s) it wishes to target. Evaluating Market Segments, the first step in evaluating market segments is where the company gathers data on sales, growth and expected profit for the various segments in order to select segments that have the right size and growth characteristics. Next, the company examines the structural attractiveness of the segments, including: current and potential competitors; substitute products; and power of buyer and suppliers (if you wish to read more on structural attractiveness, refer to michael Porters five forces). Finally, the company must consider the segment with regards to its objectives and resources. If a segment is in line with company objectives, the company must still consider if it has the superior skills and resources in comparison with competition to succeed in that segment. Target Market Selection, after evaluating the various market segments, a company must choose one or more of these segments to make up its target market. Therefore, a target market is a set of buyers with common characteristics which a company decides to serve.
Kelloggs nutrition and health (eg. Sultana bran diet (eg. Special k taste (eg. Cocopops for kids price (eg. Notice how each segment has particular products or brand which caters for the needs of that particular segment? Bases for Segmenting Industrial Markets, many of the variables used in segmenting consumer markets can be applied to the segmentation of industrial markets. Continue, requirements for Effective segmentation. Useful word market segments must demonstrate the following characteristics: The size and purchasing power of the segments must be measurable.
For example, you may divide a country into northern, southern, eastern and Western regions. But, you may still describe each of the regions business in terms of the demographics of the buyers living there. Age, income, sex, occupation, race, etc. Psychographic segmentation, using psychographics to segment markets divides buyers into groups based on socioeconomic status, lifestyle or personality characteristics. Example, dividing the australian market into leisure-seekers, work-oriented, and family-oriented segments. Behaviour segmentation is where buyers are divided into groups based on their product knowledge, usage, attitudes or responses. Within behaviour segmentation, of particular importance is a powerful form of segmentation, benefit segmentation, which groups buyers depending on the various benefits sought by buyers from pdf the product class. For example, you could segment the cereal market based on the benefits sought by cereal buyers: brand (eg.
There is no one right way of segmenting markets. A marketer has several bases available to him/her for the segmentation of markets. Bases for Segmenting Consumer Markets. Segmenting markets on the basis of geography involves dividing the market into different geographical units,. States, regions, countries, where the company pays attention to geographical differences in needs and wants. For example, there may be a greater need for T-shirts in the northern part of Australia all year round rather than in the southern part. Demographic segmentation, demographic segmentation involves dividing the market into groups based on demographic variables such as age, family size and life cycle, occupation, etc. It is the most popular bases for segmenting consumer markets because consumer needs often vary closely with demographic variables, an also because of the ease of measurement of the variables. Even when other bases are used for segmentation, demographic variables are still used in the description of the segments.
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It is based on Total satisfaction from a service rather than individual benefits. Examples: When someone is going out to dinner McDonalds and local restaurant will not come in the same breathe for choices of where. When purchasing a computer the benefit sought will be of ease of use. The demand for turkeys increases during Christmas, flowers and chocolates on mothers day and. Market Segmentation Essay, research Paper, market Segmentation, market segmentation is the division of a market into distinct groups of buyers who might require different products or marketing mixes (Kotler et lean al, 1994).
It is the division of a heterogeneous market consisting of buyers with different needs and wants, into homogeneous segments of buyers with similar needs and wants. Therefore, the segments are heterogeneous between (ie. All the segments are different,. One segment all males, one segment all females) themselves, but homogeneous within (eg. Within the male segment, all buyers are male; within the female segment, all buyers are female). Segmentation is important as buyers have unique needs and wants. In segmenting a market, marketers look for broad classes of buyers who differ in their needs.
Introduction of Maxim, a male lifestyle magazine covering male fashion, films, cars, sports and technology. Psychographic Segmentation: oIt is based on variables such as values, attitudes, opinions, interests, personality and lifestyle. OIt is used highly in the hospitality industry ovals (Values And Lifestyles) Principle Oriented- principles or beliefs rather than feelings, events, or desire for approval. Status Oriented- status or other peoples actions, approval, or opinions. Action Oriented- action prompted by a desire for social or physical activity, variety, and risk taking. Behavioral Segmentation: It is based on variables such as usage rate and patterns, price sensitivity, brand loyalty, and benefits sought.
It refers to why people purchase a product or service. How will the product enhance their overall lifestyle? Occasion is another variable. When should a product be purchased? Occasion segmentation aims to increase the reason to buy factor and thus increase sales. Usage rate divides customers into light, medium and heavy users. Heavy users obviously contribute more to turnover then light or medium users, the objective of an organization should be to attract heavy users who will make a greater contribution to company sales. It is based on benefits people seek when buying a product.
It is based on variables reviews such as age, gender, ethnicity, education, occupation, income, and family status. Demographics originate from the word demography which means a study of population. The population can be divided into age, gender, income, and family lifecycle amongst other variables. As people age their needs and wants change, some organizations develop specific products aimed at particular age groups. Gender segmentation is commonly used within the cosmetics, clothing and magazine industry. Income segmentation is another strategy used by many organizations Products and services are also aimed at different lifecycle segments. Examples: For different age groups: Nappies for babies, toys for children, clothes for teenagers and.
Marketers use geographic segmentation because consumers in different parts of world vary in characteristics and behaviors. An area can be divided by the town, the region or the country. If you are an organization working on a global scale you may divide by global regions such as Europe, north America, south America, asia and Africa. Example: McDonalds globally, sell burgers aimed at local markets, for example, they also offer vegetable burgers in India due to lots of vegetarians and burgers are made from lamb in India rather manual than beef because of religious issues also. In Mexico more chili sauce is added and. In Muslim countries halal food is offered. In Arabic countries Arabic food is offered like mc Arabia.
neglected by other marketer. Segment further divided into sub segments to cater unsatisfied needs of small group is called as niche. Local Marketing: Marketers offer customized products to suit the local markets. McDonalds introduced Muslimized or Arabic products such as Big Mac, halal Chicken, mac Arabia, and more. Variables to segment the market: There are a number of segmentation variables that allow an organization to divide their market into homogenous groups. These variables will be discussed briefly below: geographic, demographic, psychographic, behavioral, geographic segmentation, it is based on regional variables such as region, climate, population density, and population growth rate. Geographic segmentation divides markets into different geographical areas.
Market segmentation makes possible how to use marketing mix for different target markets. A company is then able to determine which groups of customers are best suited to serve and which product and service offers will meet the needs of the customers and will satisfy them. Therefore, the main objective of segmentation must be how to win and retain the customers you want to serve. If the segmentation process is done properly then it will insure the maximum return for your marketing and sales expenditures, depending on what you are selling and whether you are selling your offerings to individual consumers or a business. Levels of Market Segmentation, segment Marketing. Individual Marketing, niche marketing, local Marketing, segment Marketing: dividing the market professional into different segments on the basis of homogenous need. Segmented on basis of broad similarity with regard to some attributes. Segmentation is also sometimes identifying, capturing retaining potential new markets. Individual Marketing: Extreme marketing in which marketers focus on individual customers.
What Is Demographic Segmentation in Marketing
An organization cannot satisfy all the needs and wants of all the consumers. Therefore, market is divided into different segments so an organization can focus on the needs and wants of the specific consumers who share similar needs and demonstrate similar buyer behavior. In the world, there are different types of buyers with their own needs and behavior. Segmentation is the process to match groups of the purchasers with same needs and wants. Market segmentation: The division of a market into different groups or the process of splitting customers in a market into different groups or segments, within which customers show similar buying behavior and share a similar level of interest in the same set of needs and. Reasons for segmentation of market: we will write a custom essay sample on Market Segmentation specifically database for you for only.38.9/page, order now, we will write a custom essay sample on Market Segmentation specifically for you. For only.38.9/page, hire Writer, we will write a custom essay sample on Market Segmentation specifically for you. For only.38.9/page, hire Writer, the reason for segmenting a market is to allow your marketing program to focus only on the segment that is most likely to buy your offering.