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MarketingPrelim2 - Chapter 9 Identifying Market Segments...

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Chapter 9: Identifying Market Segments and Targets 16/10/2006 19:24:00 Sneakers and Marketing Reebok says the “standard more restrictive deal would have risked tagging its rapper allies as walking billboards for the corporation, hurting their counter cultural appeal. All sneaker manufacturers are searching for new market segments of consumers and ways to differentiate their products from their global competitors. Heelys sneakers sold 1 million pairs in 2001, its first year of operation. Competitive Trends These trends should be considered in planning for sneaker wars for 2005 and beyond: o Age segments: teenagers/college aged consumers comprise more than 32 percent of total sales. o Gender segments: women sales growth is higher than men, and men by double at higher average prices o Price segments: more than 62 percent fo sneakers today cost less than $50 a pair o Sport segments: running shoes = 29 percent market share, basketball shoes = 21 percent, cross-training shoes = 13 percent o Lifestyle segments: almost 3/4s of all sneakers are purchased for casual rather than for sports or fitness purposes. Why Segment Markets A business firm segments its market so it can respond more effectively to the wants of groups of potential buyers and thus increase its sales and profits. Market segmentation involves aggregating prospective buyers into groups that (1) have common needs and (2) will respond similarly to a marketing action Market segments: are the relatively homogeneous groups of prospective buyers that result from the market segmentation process. Product differentiation: a marketing strategy that involves a firm’s using different marketing mix activities, such as being different and better than competing products. The process of segmenting a market and selecting segments as targets is the link between the various buyers’ needs and the organization’s marketing program Marketing segmentation first stresses the importance of grouping people or organizations in a market according to the similarity of their needs and the benefits they are looking for in making a purchase. Secondly such needs and benefits must be related to specific marketing actions the organization can take. Using Market Product Grids
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Market-product grid: is a framework to relate the market segments of potential buyers to products offered or potential marketing actions by the firm There are both primary and secondary markets, market segments are the rows, and the columns show the different product lines (refer to pg 234). For Reebok, 30 percent are performance oriented consumers, and 70 percent are non athletic oriented consumers Reebok will use this information to try to differentiate its products more clearly from its global competitors and perhaps target new or retarget existing global consumers. When to Segment Markets
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MarketingPrelim2 - Chapter 9 Identifying Market Segments...

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