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Why do we use segmentation?
Since all consumers have different needs and wants, it is not possible to satisfy everyone with same service/product.
What is a three-step process behind segmentation?
- Segment market,
- deciding which segments to target,
- decide how to differentiate and position your product/service to best address the needs of your target market
What are the major segmentation variables for consumer markets?
What is the criteria for a successful segmentation?
- Indentifabilty and measureablity
What are the three main targeting approaches?
- Multi Segment
What is Undifferentiated Targeting? and its pros and cons
- Marketing the same product to the entire market the same way.
- +low cost for marketing
- +Allows for efficient production of large volumes.
- -Universal offering not adapted to differences
- vulnerable to competition
What is concentrated targeting? What are pros and cons?
- The company selects one segment for its marketing efforts.
- +Resources are concentrated in one area.
- +Company can develop a highly specialized marketing
- -all eggs in one basket, problem is segment shrinks
- -company vulnerable if competition increases in segment.
What is multi segment targeting? What are pros and cons?
- Company targets two or more segments with different marketing mix for each. Difference can range from new promotion to entirely new product.
- + Company can satisfy larger share of market.
- +increases sales volumes compare to concentrated strategy
- -more costly
What is cannibalization?
Cannibalization happens when a company's product steals market share from another of its own products. (Happens in multisegment targeting)
What is one to one marketing? (targeting)
it is CRM used as a targeting tool. Targeting segments of one customer at a time.
What is positioning?
Positioning is a design of and implementation of a marketing mix to create an image of the brand in the customers mind relative to competitors.