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Chapter 7 Segmentation

Principles of marketing
by

sohel is

on 23 October 2011

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Transcript of Chapter 7 Segmentation

Market segmentation

Dividing a market into distinct groups
of buyers on the basis of needs,
characteristics, or behavior who
might require separate products
or marketing mixes. Instead of scattering the marketing effort
(the “shotgun” approach), firms are focusing
on the buyers who have greater interest
in the values they create best (the “rifle” approach). Levels of market segmentation Mass marketing Segment marketing Niche marketing Micromarketing Mass-producing, mass distributing, and mass promoting about the same product in about the same way to all consumers.
“One size fits” all marketing
Mass marketing is dying Isolating broad segments that make up a market and adapting the marketing to match the needs of one or more segments.
Effectively communicate its marketing offer There will be no market for products that everybody likes a little, only for products that somebody likes a lot.
Focusing on sub segments or niches with distinctive traits that may seek a special combination of benefits.
Niches are smaller and normally attract one or a few competitors.
Customers willingly pay a price premium.
Niching offers smaller companies an opportunity The practice of tailoring products and marketing programs to suit the tastes of specific individuals and locations.
Two types: Local Marketing and Individual Marketing Local marketing:
Tailoring brands and promotions to the needs and wants of local customer groups- cities, neighborhoods and even specific stores.
Drive up manufacturing and marketing cost.
Logistic problems
Brand’s overall image might be diluted. Individual marketing:

Tailoring products and marketing programs to the needs and preferences of individual customers- also labeled one-to-one marketing, customized marketing and markets-of-one marketing.
Mass customization
Self-marketing and marketer has less influence over buying decision of consumers. Chapter 7
Market Segmentation Segmenting consumer markets
Segmenting business markets
Segmenting international markets
Geographic
Demographic
Psychographi
Behavioral
Table 7.1
Demographics
Operating variables
Purchasing approaches
Situational factors
Personal characteristics
Geographic location
Economic factors
Political and legal factors
Cultural factors

Forming segments of consumers who have similar needs and buying behavior even though they are located in different countries. Ex. MTV Intermarket segmentation: Requirements for effective segmentation •Measurable
•Accessible
•Substantial
•Differentiable
•Actionable
1. Segment size and growth: It’s a relative matter.

2. Structural factors: competitors, substitute products, power of buyers, powerful suppliers

3. Company objective and resources: must mesh with long-run objectives and resources.
Evaluating target market Selecting market segments (Target market selection)
Three market coverage strategies:
1. Undifferentiated marketing
2. Differentiated marketing
3. Concentrated marketing
Choosing a market coverage strategy
• Company resources
• Product variability
• Life cycle stage
• Market variability
• Competitor’s marketing strategies
1. Undifferentiated marketing
2. Differentiated marketing
3. Concentrated marketing
Full transcript