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Introduction to Marketing Chapter 9

Introduction to Marketing Chapter 9 - Introduction to...

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Introduction to Marketing Lecture Outline Chapter 9 : Identifying Market Segments and Targets Learning Objectives: 1. understand the 3 phases of developing a target market strategy. 2. Understand the steps involved in segmentation and target marketing. 3. understand the need for market segmentation. 4. know the different dimensions used to segment markets. 5. understand bases used to segment business-to-business markets and consumer markets. 6. explain how marketers evaluate and select potential market segments. 7. explain how to develop a target market strategy. 8. understand how to develop a positioning strategy. There are three main parts in the Target Marketing Process: o Segmentation – identifying the various groups in the general market. o Targeting – deciding on one or more groups using some evaluation criteria. o Positioning – developing a marketing mix which will provide a competitive advantage and satisfy the needs of the target market very well. I. Segmentation Firms use market segmentation – dividing the market in to distinct subset of consumers that behave in the same way or have similar needs. Each subset could potentially become a target. The goal should be to create product differentiation to suite the unique requirements of different segments. The focus should not be on the produc t in defining the market - it should look at the “ need ” the product satisfies. E.g. Hallmark Cards - ‘personal expression’ market. Steps in Segmenting and Targeting Markets
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1. Form Potential Buyers into Segments – decide if this market is worth segmenting. Criteria for successful segmentation 1. Homogeneous (similar) within - the customers in a market segment should be as similar as possible with respect to their likely responses to marketing mix variables and their segmenting dimensions. 2. Heterogeneous (different) between – with respect to the segmenting dimensions. 3. Substantial - segment should be large enough to be profitable 4. Operational - segmenting dimensions should be useful for identifying customers and deciding on marketing mix. The segmenting criteria should be Measurable. 5. Reachable – the Marketing communications must be able to reach the segment. 6. Manageable - the Marketer must be able to adequately serve the needs of the segment i.e. have the resources to meet the needs of the segment. Establishing Basis for Segmentation: Geographic Dimension Personal Demographic Dimensions Psychographics Dimension Behaviour – usage rate, occasion of use etc.
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