OE 4 EXPLAIN THE CONCEPT OF TARGET MARKETS OE 3 Describe market segmentation methods used to identify target market (i.e., demographics, geographic, psychographics, product benefits and behavioral)
market planning/segmentation The process of defining and subdividing a large homogeneous market into clearly identifiable segments having similar needs, wants, or demand characteristics. Its objective is to design a marketing mix that precisely matches the expectations of customers in the targeted segment.
Few companies are big enough to supply the needs of an entire market; most must breakdown the total demand into segments and choose those that the company is best equipped to handle.
Market Segmentation - Identifying a target market by dividing the market into segments according to customer needs and characteristics Market segmentation helps marketers sell more efficiently.
The four basic market segmentation-strategies are based on... -behavioristics - what your target market does, how the behave, work shop play -demographic - basic characteristics - age sex race religion income education level etc... -psychographic - attitudes and opinions of your target market, what they like. -geographic - where the target market shops and lives
mass marketing - Mass marketing is a market coverage strategy in which a firm decides to ignore market segment differences and appeal the whole market with one offer or one strategy (Ford's model T)
target market - A target market is a group of customers towards which a business has decided to aim its marketing efforts and ultimately its merchandise
disadvantages of market segmentation A.Costs more to differentiate packaging, promotion, etc. to more than one market B.Research and identification is costly C. Production costs increase when the product is changed to meet the needs of more than one market D. Only used when the potential sales will exceed sales from marketing to one larger group E. Risk is involved with smaller diversified markets
What is Positioning? -It is the act of designing the company’s offering and image to occupy a distinctive place in the target market’s mind. -Positioning is not what you do to the product -Positioning is what you do to the mind of the prospect -Customer does the Positioning -A product may have many distinctions. Which are most important to the customers? -image in the minds of the customer
Examples: Crest toothpaste - Promotes its anti-cavity protection Mercedes - Promotes its great engineering BMW - Ultimate driving machine