Segmentation And Target Marketing Strategy

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At its core, any sound business strategy should be based on a sound understanding of the needs and wants of its customers and striving to not only meet, but exceed those expectations. In order to meet those needs, potential customers need to know who you are. This is where marketing, or more specifically, segmentation and target marketing, take their role in an overall corporate strategy. As all markets are heterogeneous (Baker & Hart, 2008, p. 222), attempts to please all of the people all of the time are doomed to fail. In order to effectively use marketing resources to meet a company’s goals, it is often in their best interests to develop a marketing strategy with a basis in segmentation. The market segmentation process involves six…show more content…
In order to select the best possible target markets, segmentation cannot merely be a random breakdown of consumers into subgroups. In order for segmentation to be effective, the determined segment must meet three criteria: that it is measurable, meaning that its size or characteristics can be quantified; that it is marketable, that members of this segment can be reached by existing or possible distribution and marketing channels and are willing to pay enough for the product to be profitable; and that it is meaningful. A meaningful segment has characteristics such as growth potential or a large enough existing size that it is worthwhile for a company to pursue those customers (Peter & Donnelly, 2015, p. 83). In order for the expenditure resources used in segmentation to have value for a company, they must first decide what type of marketing strategy they wish to pursue. There are two major types: a concentration strategy and a multi-segment strategy (Boundless.com, n.d.). A concentration strategy is when a marketing team decides to hone in on a particular market, whereas a multi-segment strategy focuses on two or more separate market segments. Deciding on which one to use is where the fourth step in the market segmentation process comes into play – product positioning. Product positioning, which has little to do with the actual product and much more to do with the consumer perceptions of it. It is possible for two companies to sell essentially the
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