The company also needs to examine major structural factors that affect long-run segment attractiveness. •A segment is less attractive if it already contains many strong and aggressive competitors. •The existence of many actual or potential substitute products may limit prices and the profits. •The relative power of buyers also affects segment attractiveness. A segment may be less attractive if it contains powerful suppliers who can control prices.
B- Selecting Target Market Segments: After evaluating different segments, the company must decide which and how many segments it will target. A target marketconsists of a set of buyers who share common needs or characteristics that the company decides to serve. Market targeting can be carried out at several different levels. Companies can target very broadly (undifferentiated marketing), very narrowly (micromarketing), or somewhere in between (differentiated or concentrated marketing).
1- Undifferentiated marketing (or mass-marketing) strategy: A market-coverage strategy in which a firm decides to ignore market segment differences and target the whole market with one offer. This mass-marketing strategy focuses on what is common in the needs of consumers rather than on what is different. 2-Differentiated marketing (or segmented marketing) strategy: A market-coverage strategy in which a firm decides to target several market segments and designs separate offers for each. Goal is to achieve higher sales and stronger position. It is more expensive than undifferentiated marketing
3- Concentrated marketing (or niche marketing) strategy: A market-coverage strategy in which a firm instead of going after a small share of a large market, it goes after a large share of one or a few smaller segments or niches. It can market more effectivelyby fine-tuning its products, prices, and programs to the needs of carefully defined segments. It can market more efficiently, targeting its products or services, channels, and communications programs toward only consumers that it can serve best and most profitably.4-Micromarketing:is the practice of tailoring products and marketing programs to suit the tastes of specific individuals and locations. Micromarketing includes local marketingand individual marketing.
•Local marketinginvolves tailoring brands and promotions to the needs and wants of local customer groups—cities, neighborhoods, and even specific stores. Local marketing has drawbacks. 1- It can drive up manufacturing and marketing costs by reducing economies of scale. 2- It can create logistics problems.•Individual marketing is the tailoring of products and marketing programs to the needs and preferences of individual customers. Individual marketing has also been labeled one-to-one marketing, mass customization, and markets-of-one marketing.
C- Choosing a targeting strategy:Which strategy is best depends on:•Company resources•Product variability•Product life-cycle stage•Market variability•Competitor’s marketing strategies
Differentiation and Positioning (Obj.4)
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