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What is market segment?
A subgroup of people or organization sharing one or more characteristics that cause them to have similar product needs.
What is market segmentation?
The process of dividing a market into a meaningful identifiable segments or groups.
Importance of segmentation?
- 1. markets have a variety of products needs and preferences.2. marketers can better define customer needs
- 3. can better define marketing objectives and allocate resources effectively
Successful segmentation criteria means?
- substantiality - S must be large enough to warrant a special marketing mix
- identifiable & measurable
- accessibility - members of targeted segment must be reachable (i.e senior citizens, hard of hearing, no English)
- responsiveness - if segment responds no differently than other, there is no need for another segment (i.e. if all consumers are price-conscious, there is no need to develop low, medium & high price version)
Bases for consumer segmentation are:
- 1. geography
- 2. demographics
- 3. geodemographics
- 4. psychographics
- 5. benefits sought
- 6. usage rate
- ...region of the country/world
- market size
- market density
Demographic segmentation is based on?
- ethnic background
- family life cycle
demographic characteristics of consumers who live within geographic clusters such as zip code areas and neighborhoods
customers who reside insimilar areas also share demographic and lifestyle similarities.
Usage rate segmentation means
dividing a market by the amount of product bought or consumed
Bases for business segmentation are:
company characteristics (geographic location, type of industry & company size)
behavior charact.(volume of purchase, key criteria, purchasing strategy, personal characteristics of buyers, product use)
Steps in segmenting market are:
- 1. select a market to study
- 2. choose bases for segmentation
- 3. select descriptors
- 4. profile & analyze segments
- 5. select target markets
- 6. design & implement marketing mix
Targeting strategies are:
- undiferentiated - approach that views market as one big market with no individual segm. and uses a single marketing mix
- concentrated - selects one segment (niche) for targeting market efforts (benefits: concentration of resources, can better meet needs of narrowly defined segment / disadv: segment to small or changing, large competitors may market better)
- mutli-segment - chooses 2 or more well-defined segments (greater sales volume, higher profits / disadv.: higher cost, cannibalization)
- one-to-one marketing - utilizes customer info to buil long-term personalized relationships with each customer.
What is positioning?
a process that influences customer's overall perception of a brand, product line or an organization
What is position?
the place that product or a brand occupies in consumers' minds relative to competing offerings.
Positioning bases are:
- price & quality
- use or application
Perceptual mapping is?
displaying a product/brand in 2 or more dimensions
changing custoemer's perception of a brand relating to competing brands.