Customer-Driven Marketing Strategy: Creating Value for Target Customers 7 Principles of Marketing. Market Segmentation Using Multiple Segmentation Bases PRIZM NE classifies every American household into 66 unique segments organized into 14 different social groups. Trader on line com:The Strategic Marketing simulation exposes participants to all aspects of modern marketing. CHAPTER 4 Market Segmentation, Targeting, and Positioning for Competitive Advantage Objective: explaining how companies segment, target and position for. Markets Originally, a market is a physical place where buyers and sellers gather to exchange goods and services.
Mass marketing: here, the seller mass produces, mass distributes, and mass promotes one product to all buyers. Micromarketing Today companies are using target marketing instead of mass marketing and product-variety marketing. Geographic Segmentation Companies may divide the market into different geographic units such as nations, countries, regions, cities… Companies may divide the market into different geographic units such as nations, countries, regions, cities… A company may decide to operate in one or more geographic locations but it must pay attention to the geographical differences in needs and wants. Behavioral Segmentation Companies may divide buyers into groups based on their knowledge, attitudes, uses or responses to a product. Some companies do not prefer to segment the international markets on the basis of geographic, economic, political, cultural, and other factors.
Market Targeting Evaluating Market Segments After segmenting the whole market, the firm has to evaluate these segments and decide how many and which ones to target.
Selecting Market Segments The company must decide which and how many segments to serve, in other words, the company must decide which market-coverage strategy to adopt.
Undifferentiated Marketing A market-coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer. Differentiated Marketing A coverage strategy in which a firm decides to target several market segments and designs separate offers for each. Creates better total sales, but increases the costs - developing separate marketing plans for the separate segments requires extra marketing research, sales analysis, promotional planning, channel management. Concentrated Marketing A market-coverage strategy in which a firm goes after a large share of one or a few submarkets. A firm may select undifferentiated marketing, concentrated marketing or differentiated marketing.i. Define the three steps of target marketing: market segmentation, target marketing, and market positioning 2.
Discuss the need to understand competitors as well as customers through competitor analysis 2.

These groups segment people and locations into marketable groups of like- minded consumers that exhibit unique characteristics and buying behavior based on a host of demographic factors. Market segmentation; dividing a market into distinct groups of buyers with different needs, characteristics or behaviors who might require separate products or marketing mixes. A marketer has to try different segmentation variables, alone and in combination to understand the structure of the market in the best way. Coca Cola, Sony… sell products in many different countries which vary in their economic, cultural and political make up. A companys economic structure shapes its populations product and service needs, therefore, the marketing opportunities that it offers.
Instead they prefer to do intermarket segmentation in which companies form segments of consumers who have similar needs and buying behavior even though they are located in different countries. The company should enter segments only where it can offer superior value and gain advantages over competitors. Undifferentiated Marketing (Mass Marketing): The firm tries to reach a wide range of consumers with one basic marketing plan. Explain the fundamentals of competitive marketing strategies based on creating value for customers 3.
In marketing, a market is the set of all actual and potential buyers of a product or service.
Even, today, target marketing is taking the form of micromarketing - designing the companies marketing programs to the needs and wants of narrowly defined segments, often called niche marketing.
That is why, international firms need to group their world markets into segments with distinct buying needs and behaviors.
Here, the offer focus on what is common in the needs of consumers rather than on what is different.
Nike offers athletic shoes for different sports such as running, aeobics, cycling, baseball, basketball, tennis… A coverage strategy in which a firm decides to target several market segments and designs separate offers for each. Because of the high costs involved in this approach, the company must compare increased sales with increased costs when deciding to use differentiated marketing strategy. Suitable for smaller companies to achieve a strong market place in the segments (or niches) that it serves because of its greater knowledge of the segments needs. There will be no market for products that everybody likes a little, only for products that somebody likes a lot. Market targeting; evaluating each market segments attractiveness and selecting one or more of the market segments to enter.
Coca Cola is for Always occasions: buyers can be grouped according to occasions when they buy or use an item.

After you segment buyers and develop a measure of consumer insight about them, you can begin to see those that have more.
As marketing evolves in time, companies used different philosophies in their approaches to a market. Coca Cola is for Always benefit sought: buyers can be grouped according to the benefits that they seek from the product. Provides cost effectiveness because of its low production, inventory, transportation, advertising, marketing research costs. Their thinking about serving a market passed through three stages; As marketing evolves in time, companies used different philosophies in their approaches to a market. Market positioning; setting the competitive positioning (difference) for the product and creating a detailed marketing mix. Such factors can play a crucial role in a companys choice of which countries to enter and how.
Recently Pepsi introduced its sugar-free Pepsi Max in 16 countries with a single ad for teenagers who like to be on the wild side.
Some companies prefer to target segments with large current sales, a high growth rate, and a high profit segment size and growth; companies try to select the segment with right size and growth for themselves.
Product-variety marketing: here, the seller produces two or more products that have different features, styles, qualities, sizes… Later, McDonalds produced Big Mac to offer variety to buyers rather than appealing to different market segments. Concentrated Marketing: The firm concentrates on one group of consumers with a distinct set of needs and uses a tailor-made marketing plan to attract this single group.
Concentrated marketing can let a firm maximise per unit profits, but not total profits, since only one segment is sought. Shree Leathers, Shoe maker in Kolkata targets middle class customers segment for all of its shoes.iii.
Target marketing: here, the seller identifies market segments, selects one or more of them, and develops products and marketing mixes for each. Differentiated Marketing (Multiple Segmentation): Differentiated Marketing enables a firm to appeal to two or more distinct market segments, with a different marketing plan for each. It combines the best aspects of undifferentiated marketing and concentrated marketing.Firms may use both mass marketing and concentrated marketing in their multiple segmentation strategies. Multiple segmentation lets a firm diversify and minimise risks because all emphasis is not placed on one segment.

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