1. Market Segmentation
1. Market Segmentation
Definition:
Process of defining and sub sub-dividing a large homogenous market into clearly identifiable segments having similar needs, needs , wants, or demand characteristics. characteristics .
Objective is :
to design a marketing mix that precisely matches the expectations of customers in the targeted segment. Few firms are big enough to supply the needs of an entire market, most must breakdown the total demand into segments and choose the one or few the firm is best equipped to handle. http://www.businessdictionary.com/definition/market-segmentation.html
1. Market Segmentation
Requirements for effective segmentation
There are many ways to segment a market. To be useful, market segments must be: (a) accessible degree to which a market segment can be reached and served. (b) actionable degree to which effective programmes can be designed for attracting and serving the given market segment. (c) measurable degree to which size, purchasing power and profits of a market segment can be measured. (d) substantial degree to which a market segment is sufficiently large or profitable.
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1. Market Segmentation
1. Market Segmentation
1. Market Segmentation
Does it worth your effort to design and develop a unique marketing mix for a specific segment that is not attractive?
Criteria of segment for developing marketing plans:
Can the segment be measured? Is the segment big enough? Can the segment be reached Do segments respond differently? Can the segment be reached profitably? Is the segment suitably stable?
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1. Market Segmentation
1. Market Segmentation
1.5 Target markets
A target market is a market or segment selected for special attention by an organization (possibly served with a distinct marketing mix) It can adopt one of the following market coverage strategies:
2.1 Undifferentiated (Mass) Marketing
Produce a single product and hope to get as many customers as possible to buy it.
2.2
2.3
Differentiated Marketing
The company attempts to introduce several products versions, each aim at different market segments
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company resources the degree of product variability products life-cycle stage market variability competitors marketing strategies
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The concept of family life cycle is based on the idea that the structure membership and lifestyle of a family change over time, with the age of the individual members. The family progresses through a number of common stages of development. Researchers note that the familys economic character income, expenditure and consumption priorities will also change.
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Psychographics is a form of consumer research which builds up a psychological profile of consumers in general, or users (potential users) of a particular product. It is the main basis of psychological segmentation of a market, and appropriate product positioning.
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Lifestyle analysis AIO analysis Activities (how customers spend their time); Interests (or preferences) and Opinions (where they sand on product related issues)
Lifestyle refers to distinctive ways of living adopted by particular communities or subsubsections of society. Lifestyle is a manifestation (expression) of a number of behavioral factors, such s motivation, personality and culture, and depends on accurate description
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Culture (shared values, beliefs an artefacts of a society) is deeply embedded in everyday behavior, but is susceptible to measurement to some extent.
(a) Attitude measure techniques (b) Projective techniques (c) Content analysis (d) Observation (e) Surveys
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6. SEGMENTING INDUSTRIAL MARKETS Although industrial markets are usually smaller than consumer markets, segmentation can still be worthwhile. How could segmentation be done for industrial markets?
(a) By location (b) Customer size (c) Usage rate (d) Industry classification (standard industry classification) (e) Product use
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Positioning is the act of designing the companys offer and image so that it offers a distinct and valued place in the target customers mind.
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Identifying possible competitive advantages Products, services, channels, people or image can
be sources of differentiation.
Criteria for Meaningful Differences Important Superior Preemptive Distinctive Communicable Affordable
Profitable
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Pay more for More Value Proposition Pay more for the Same Value Proposition Pay same price as competitors for Less Value Proposition Pay less for Much Less Value Proposition Pay More for Less Value Proposition
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Reposition
Marketing strategy to change the position of its product in consumers minds relative to the positions of competing products
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Perpetual Mapping
Brands can be positioned in relation to competitive brands on product maps in which relative positions are defined in terms of how buyers perceive key characteristics.
Price and quality are clearly important elements in every marketing mix, but in the customers opinion, they cannot be considered independent variables. A high price will almost always be associated with high quality and equally, low price with low quality. Thus, while everybody would like to buy a bargain brand, there is a problem to overcome. Will customers accept that a high quality product can be offered at a low price?
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Perpetual Mapping
A basic perceptual map plots brands in perceived price and perceived quality terms. High Price Cowboy brands Low Quality Economy Brands Bargain Brands Premium Brands High Quality
Low Price
Figure 6.13 - Product positioning map: Breakfast market
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Perpetual Mapping
As Kotler demonstrate, perceptual maps can also indicate how customers perceive competitive brands performing on key product user benefits Expensive Bacon and Eggs. Slow Pancakes Hot cereal Instant breakfast Cold cereal Quick
Inexpensive
Figure 6.13 - Product positioning map: Breakfast market
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Perpetual Mapping contd What do the companies offer and what kind of image you do you perceive from these brands?
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