A Write Up About

8/10/2019 A Write Up About

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A write up about

Market Segmentation, Targeting and

Positioning for Market Advantage

In partial fulfilment

Of the requirements

In Principles of Marketing

Submitted by Group 3:


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Market Segmentation

Market segmentation is a crucial marketing strategy. Its aim is to identify and

delineate market segments or "sets of buyers" which would then become targets

for the company's marketing plans. The advantage to marketing management is

that this technique divides total demand into relatively homogeneous segments

which are identified by some common characteristics. These characteristics are

relevant in explaining and in predicting the response of consumers, in a given

segment, to marketing stimuli.

Market Segmentation can be defined as the process of breaking down all

consumers into groups of potential buyers with similar characteristics or grouping

consumers by some criteria, such that those within a group will respond similarly

to a marketing action and those in a different group will respond differently.

Levels of Market Segmentation

Market segmentation represents an effort to increase a companys targeting

precision. It can be carried out at four levels: mass, segment, niche and

micromarketing.

In mass marketing, the seller engages in the mass production, mass

distribution, and mass promotion of one product for all buyers. Henry Ford

epitomized this marketing strategy when he offered the Model-T Ford to all

buyers; they could have the car in any color as long as it is black. Coca-Cola

also practiced mass marketing for many years when it sold only one size Coke in

a 6.5-ounce bottle.


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A market segment consists of a large identifiable group within a market. A

company that practices segment marketing recognizes that buyers differ in their

wants, purchasing power, geographical locations, buying attitudes, and buying

habits. At the same time, though, the company is not willing to customize its

offer/communication bundle to each individual customer. The company instead

tries to isolate some broad segments that make up a market. For example, an

auto company may identify four broad segments: car buyers seeking basic

transportation, those seeking high performance, those seeking luxury, and those

seeking safety.

Segment marketing offers several benefits over mass marketing. The

company can create a more fine-tuned product/service offer and price it

appropriately for the target audience. The choice of distribution channels and

communications channels becomes much easier. And the company may face

fewer competitors if fewer competitors are focusing on this market segment.

Market segments are normally large identifiable groups within a marketfor

example, nonsmokers, occasional smokers, regular smokers, and heavy

smokers. A niche is a more narrowly defined group, typically a small market

whose needs are not being well served. Marketers usually identify niches by

dividing a segment into subsegments or by defining a group with a distinctive set

of traits who may seek a special combination of benefits. For example, the sema,

and heavy smokers with emphysema who are overweight.

Micromarketing consists of Local marketing and Individual marketing. In local

marketing, target marketing is increasingly taking on the character of regional and

local marketing, with marketing programs being tailored to the needs and wants


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of local customer groups (trading areas, neighborhoods, even individual stores).

Thus Citibank provides different mixes of banking services in its branches

depending on the banks neighborhood demographics. And Kraft helps

supermarket chains identify the cheese assortment and shelf positioning that will

optimize cheese sales in low-income, middle-income, and high-income stores,

and in different ethnic communities. In comparison, Individual marketing, the

ultimate level of segmentation leads to segments of one, customized

marketing, or one-to-one marketing. The prevalence of mass marketing has

obscured the fact that for centuries consumers were served as individuals: The

clothier tailor-made the suit, the cobbler designed shoes for the individual, and so

on. And much business-to-business marketing today is customized, in that a

manufacturer will customize the offer, logistics, and financial terms for each major

account. It is the new technologiesspecifically computers, databases, robotic

production, and instant communication media such as e-mail and faxthat are

permitting companies to consider a return to customized marketing, or what is

called mass customization. Mass customization is the ability to prepare on a

mass basis individually designed products and communications to meet each

customers requirements.

Bases for segmenting

Documents

A Write Up About