chapter 6 - Department of Marketing & Decision Sciences...

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Part 2 – Identifying and Selecting Markets Market Segmentation, Targeting, and Positioning
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Introduction Introduction - Within in the same general market there are groups of customers with different wants, buying preferences, or product-use behavior market segments - As a result, the firm must decide which segment or segments to pursue target marketing - For a targeted segment the firm then moves to establish a position in the minds of its customers through the design and implementation of a marketing mix (4 P’s)
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Market Segmentation Market Segmentation - A process of dividing the total market for a product or service into several smaller, internally homogenous groups. - The essence of segmentation is that members of each group are similar with respect to the factors that influence demand. - By tailoring marketing efforts to individual market segments, a company can do a better marketing job and make more efficient use of its marketing resources this is especially important for a small firm (or a start-up) with limited resources. - However, consumers can become frustrated by the complex decision making process that is required for even a simple purchase when many similar products are available.
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Market Segmentation Market Segmentation - Markets can be segmented intuitively or on the basis of structured analysis - The steps involved in segmenting a market are: 1. Identify the current and potential wants that exist within a market 2. Identify characteristics that distinguish among the segments 3. Determine the potential of the segments and how well they are being satisfied The Process of Market Segmentation:
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Market Segmentation Market Segmentation - Often the first step is to divide a potential market into ultimate consumers and business users - Segmenting a market into these two groups is extremely significant from a marketing point of view because the two segments buy differently (see chapters 4 and 5!) The composition of marketing mix will depend on
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This note was uploaded on 09/08/2010 for the course BUS 130 at San Jose State University .

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chapter 6 - Department of Marketing & Decision Sciences...

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