Chapter_7_-_Segmenting_and_targeting

Chapter_7_-_Segmenting_and_targeting - Study Guide for...

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Unformatted text preview: Study Guide for Marketing 431 Summer 2009 Chapter 7 – Segmenting and Targeting Segmentation What is a segment? ◦ A subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs ◦ 4 conditions for a segment Similar to each other (identifiable and measurable) Different from everyone else (responsiveness) Reachable (accessibility) Economically viable (substantiality) Why Segment? ◦ So you can respond more effectively to the wants of groups of potential buyers And thus increase sales and profits ◦ Two fundamental strategies (Porter) Low cost producer Differentiation There is only room for one low cost producer Everyone else has to differentiate Study Guide for Chapter 7 – Segmentation and Targeting Page 1 Marketing 431, Summer 2009 © 2009 The law of truly large numbers ◦ No two people are exactly alike ◦ Given enough people Subset similar enough with respect to your product This subset may be large enough for you to make money This is what segmentation is all about ◦ The point: Unless you are the low cost producer in your industry – you will have to differentiate your product in order to succeed This will make your product more expensive By definition Segmentation gives you a better chance of earning back the increased cost ◦ Once you have identified market segments you can develop specific product/market offerings for the segment The four P’s This can be a way of responding to unmet needs How to segment Choose a market to study Develop bases for segmentation Study Guide for Chapter 7 – Segmentation and Targeting Page 2 Marketing 431, Summer 2009 © 2009 ◦ Criteria important to customers Select descriptors Profile segments Select target(s)...
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This note was uploaded on 10/16/2011 for the course MKTG 431 taught by Professor Brucerobertson during the Spring '07 term at S.F. State.

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Chapter_7_-_Segmenting_and_targeting - Study Guide for...

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