Market Segmentation
Market Segmentation means breaking down the total market into self contained and relatively homogeneous subgroups of customers, each possessing its own special requirements and characteristics. This enables the company to modify its output, advertising messages and promotional methods to correspond to the needs of particular segments. Accurate segmentation allows the firm to pinpoint selling opportunities and to tailors it's marketing activities to satisfy on consumer needs.
Through the process of market segmentation, there are certain variables to identify customer groups, such as needs, income geographical, location, buying habits and other characteristics as well, we can focus on the parts of the market that it can
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(B) Selecting suitable market segments with different Market -Coverage Strategies
1)Undifferentiated MarketingOne offer for the whole market.
E.g. Coke. It may be less profitable due to heavy competition.
2) Differentiated Marketing Different marketing mixes for different
segments.
E.g. Nike shoes. However, company must weigh increased sales against costs.
3) Concentrated Marketing One marketing mix for several segments,
especially appealing when company resources are limited. Mercedes cars for high income class. Which strategy is best depends on company resources.
Stage Three - Market Positioning
Arranging for a product to occupy a clear, distinctive, and desirable place related to competing products in the minds of target consumers. Formulating competitive positioning for a product and a detailed marketing mix.
E.g. Toyota is positioned on economy, Mercedes on luxury, Porsche on performance & Volvo on safety.
(A)Some positioning strategies
1)Product attributes E.g. Disney Land as a theme park.
2)Benefits sought E.g. Dell Computer, customer can order their own
configuration. No extra penny is paid for parts not needed.
3)Usage occasionsE.g. Gatorade as a beverage for replacing athletics'
body fluids.
4)Classes of usersE.g. Johnson & Johnson's baby shampoo for babies.
5)Against a competitorsE.g. CTI to HK Telecom
6)Away from competitors E.g. 7-up, "UN-cola" to Coke
What Is Market Segmentation? Market segmentation is a way of dividing the market into groups of consumers/customers which share similar features
According to Horner and Swarbrooke (2005: 39), Segmentation may be defined as the process of dividing a whole market into subgroups or segments for marketing management purposes. Market segmentation is the division of the overall market for a service into various categories with common characteristics. In response to different segments, organisations facilitate the available resources to achieve greater efficiency, in order to satisfy specific needs of customers.
The industry for superior luxury cars is a highly exclusive one with a few automotive makers making their presence felt. The major market share is held by Porsche which is known to have formidable rivals like Benz and BMW. The SUV supercar segment is a highly evolving one where manufacturing style localities and units are the decisive forces that ultimately culminate towards the cost of the car.
Market segmentation: The process of dividing a market into distinct groups of buyers who might require separate production or marketing mixes (Wells, Burnett, & Moriarty, 2006).
In order to market the product into the market successfully, marketers need to have some marketing strategy to enter the desired market and make profit. Market segmentation is the process of dividing a market into subsets of consumers with common needs or characteristics (Schiffman et al., 2011). Understanding the market size and segmentation is valuable, but the keys to effective targeting is to know just how valuable specific consumer groups are, and being able to quantify the impact of consumer trends ( Berry, 1999).
Market segmentation is a marketing strategy that involves dividing a broad target market into subsets of consumers who have common needs and applications
What is Market Segmentation? According to Investopedia (n.d), market segmentation is a term used in marketing that refers to the aggregating of a potential buyer into groups, or segments, that share common needs and would respond similarly to a particular action in marketing. By utilizing market segmentation it enables Victoria’s Secret to target different categories of consumers who recognize the full value of certain products and services differently from one another. Furthermore, market segmentation is an extension of market research for the purposes of identifying targeted groups of consumers in order to tailor products and branding in a way that it is attractive to that group. There are three general criteria used to identify different market segments: homogeneity, distinction and reaction (Investopedia, n.d).
As every customer has unique needs and expectations towards certain products, the ultimate goal of market segmentation is to organize customers into groups which allows targeting of customers with similar needs of and response to the products. The key is to minimize differentiation within each segment
Market segmentation is the process of dividing a market up into different groups of customers, in order to create different products to meet their specific needs. The most obvious type of segmentation is between customers who buy distinctly different products.
2) information search for the car, most of the customers will draw to Porsche. They admire their Porsche because it’s a competent performance machine without being flashy or phony.
Overview: Market segmentation can be done in various ways. Most companies choose to use not just one but a combination of methods:
1. Consumers tastes and preferences. Big, safe and prestigious car vs. small fuel saving cars.
Market segmentation is an approach used by a company to select their target market and provide data for a marketing plan. “Market segmentation consist of a two-step process; naming broad product markets and segmenting these broad products-markets in order to select target markets and develop suitable marketing mixes” (Perreault, Cannon, & McCarthy, 2014, p.97). There are 4 categories pertaining to market segmentation; behavioral, geographic, demographic, and behavioral.
Market segmentation was to dividing a market into distinct groups of buyers with different needs, charactistics or behaviour who might require separate products or marketing mixes, the company will first
However, due to its unique targeting strategy, it has not win compatible brand recognition among the public. Although Audi enter much earlier than BMW and Benz in the luxury car market, its marketing strategy limited increase of public brand recognition even Audi has over 100 years’ history. Besides, although its styles are highly accepted by the targeting customers, there are a growing number of people who can afford luxury cars for family use in China. Lack of vitality is limit of its further market expansion. On the contrary, its major competitor in China, BMW, has launched a series of marketing strategies to promote its high-performance, manoeuvrability, as well as stylish design to attract young people (BMW, 2009) in order to expand its market share. Therefore, although Audi has achieved success in the targeting market, it may consider further development through diversification in product line and advertising campaign.