MARKETING TARGET AND SEGMENTATION

Marketing Target and Segmentation





Marketing Target and Segmentation

Introduction

Market Segmentation reveals the firm's market segment opportunities. The firm now has to evaluate the various segments and decide how many and which ones to target.

Discussion

Market Target

In different market segments, a firm must look at three factors. Segment size and growth, segment structural attractiveness, and company objectives and resources. The company must first collect and analyze data on current segment sales, growth rates, and expected profit for various segments. It will be interested in segments that have the right size and growth. The largest, faster growing segments are not always the most attractive ones for every company. The relative process of buyers also affects segment attractiveness. Buyers with strong bargaining power relative to seller will try to force prices down, demand more services, and set competitors against one another all at the expense of seller profitability. A segment may be less attractive if it contains powerful supplies who can control prices the quality of ordered goods and services.

In market segmentation, direct marketers focus on particular subsets of the totals population that are expected to be more responsive to what the firm is selling than the whole population. By using segmentation to appeal to particular groups of consumers. Market segmentation contributes to be development of a strategy that a focuses a firm's marketing mix to best fit demand in a specific product market.

Segmentation or the idea of targeting the homogeneous product market. Heterogeneous market rather than market as a whole was initially popularized in the 1950s. It was justified by the fact that a sophisticated economy includes highly diverse market composed of different groups, or segments each unique pattern of income, spending, lifestyle, and product preferences. These clusters of buyers form cohesive groups that differ from one another as to these specific needs. Applying market segmentation involves a three stages process. 1. Identifying segments 2.Selecting target segments 3. Creating a marketing mix for each target segment.

Identifying Segments

The identification of segments involves establishing a basis for dividing consumers into groups with similar characteristics and needs. Members of each consumer is expected to behave similarly with respect to a particular product. This results in a set of segments whose members are more similar to one similar to one another than to members of other potential target market groups. Each segment is created to be as homogenous as possible.

Selecting Target Segments

Once the segments are identified, individual target markets for a firm's products are selected based on the expectation of obtaining a different response. For Sound segmentation, there must be a clear difference between the responses of people who make up one group and those who compose another. If the response, to direct marketing offer is the same by all types of people, there is no need to be selective; they might as well have been treated as one group.

Although direct marketing shares with general, image - oriented marketing an interest in identifying and pursuing groups of consumers ...