Chpt 4 Market Segmentation Process. Wax is back ! ! Some bands release on wax first DJs use wax in clubs to spin a unique sound bands want their music played in the clubs so people will buy the CDs example of a market segment being re-created by the “market”. Vinyl Records.
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In Chpt 4 we look at the PROCESS of market segmentation
We will look at the reasons for, and process of matching product offerings to specific mkt segments
you can have one whole market
you can have many small segments with a different marketing plan for each segmentTHE CORE of the firm’s strategy is to make sure the products they want to sell (the product offerings) is what the people want to buy, in each market segment
1. Company Resources
3. Stage in Product Life Cycle
4. Competitors Strategies
5. Size of Segment
The attempt to satisfy a large or a small market with one product and a single marketing program.
Usually this strategy is done by a company that does not have the money to be able to support the production and sales of many different types of products.
Eg. VW “bug”
It is very easy for a competitor company to copy your single product, and sell it at a lower price, and take away all your customers.
Sometimes called “Differentiated Marketing”
The attempt to satisfy several segments of the market very well with specialized products and unique marketing programs aimed at each segment.
Levis - in the beginning - a single-offer strategy. As jeans became more popular, different styles shapes and also different types of clothing, (shirts, jackets etc.)
jeans - slim, bootcut, hiphugger, bells, flare, painter pants etc.
Stage I: Identify Market Segmentation Bases
The process starts when a company looks at the potential customers and identifies those customers as having particular characteristics - these characteristics will allow the marketing company to classify them into market segments.
The segments should be selected so that you can group together customers who have similar needs.
Stage II Develop Relevant Profiles for each Segment
Once the segments have been identified -
should develop a profile of the relevant customer needs and behaviors in each segment.
What does your customer look like (profile) !!
What do they like !!
What do they do !!
- you need this description to be very precise in order to make your marketing “match” the needs of the customer
Stage III Forecast Market Potentials
You create a “Forecast” of the market potential within each segment.
This is the “go, no-go” stage. When you are at this stage you gather the information on sales potential to determine whether you can go further ahead and justify further analysis.
Forecast - “what if” - an expectation of future action.
Stage I V Forecast Probably Market Share
Once the market potential has been estimated, you have to determine how much of that market you can obtain (what “market share” can you capture.
Then you develop specific marketing strategy for the segments you are trying to develop.
(text eg. P&G outselling Colgate, therefore Colgate strategy changes so it doesn’t compete directly)
Stage V Select Specific Market Segments
Finally, you take all this information, and identify specific target markets.
ie. University students who have part-time jobs, and do not have credit cards
“clearly delineated target markets”=
specifically identified groups of potential customersTarget Market Decision Analysis
A “tool” (method) for outlining the scope (size and range) of the market.
Allows you to look at all possible market segments - AND then pick which ones you want to focus on.
Once you make this grid, you can then evaluate the aspects (wants, needs and motivations) of each market segment.
the assortment of product lines available
“target market decision analysis” can be used to determine the product mix being offeredUsing Target Market Decision Analysis in Assessing a Product Mix
3 types of cross trainers
4 types of basketball shoes
2 types of jogging shoes
3 types of soccer cleats
etc.Using Target Market Decision Analysis in Assessing a Product Mix
eg. Taco BellProduct Positioning
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