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Market Segmentation:
Market Segmentation is a technique for developing effective marketing strategies
and can be defined as ‘ the process of separating out distinctive groups of buyers
with similar needs and mind sets into manageable clusters – in order to develop
more focused marketing strategies’.
Segmentation of buyers can be done for B to B markets at two levels; the company
level (the type of company, size etc) and also at the individual level (type of
decision maker, psychological type.)
Segmentation helps in:
• More focused marketing strategies
• More effective product development and marketing programs
• More effective organization structure, especially for sales, service,
distribution.
A specific technique of segmentation is to take two dimensions and plot them
against each other. For example take two variable age and income levels
Market Targeting:
1. Identify market segment
2. Evaluate the opportunities in each and choose for targeting
Two factors:
1. Segment attractiveness
2. Company’s objectives and resources
Market attractiveness: parameters are chosen, weights assigned and each segment
evaluate.
Undifferentiated Marketing:
Ignoring segment differences and going after the whole market with one offer.
Design a product, a program to appeal to a broad market segment.
May lead to a superior image.
Differentiated Marketing:
A firm operates in several segments with different marketing programs for each
segment e.g. IBM
In a single market segment focus a firm can save costs by focusing marketing
mix
only in that segment.