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Segmentation
Process of dividing a varied and differing group of buyers into smaller groups, within which similar patterns of behaviour exists
Targeting
Process of deciding how many of these ‘segments’ the organisation has the skills to serve.
Positioning
The determination of the position the product or service will occupy in minds of customers, versus the competition
Market segmentation
Process of dividing the market into distinct subgroups of customers with some characteristics in common and then selecting one or more subgroups for company action to be targeted with a unique business strategy
Different variables for segmenting customer markets
Demographic: eg. Age, gender, race
Geographic: population, city size, region
Psychographic: personality, motive, lifestyle
Behaviouristic: volume usage, brand loyalty etc
Organisational segmentation examples
Back (Definition)
8 stage STP(segmentation, targeting, positioning) process
1. Identify organisations position, capabilities and objectives - situation analysis
2. Identify segmentation variables and segment markets. 3. Develop profiles of each segment - market segmentation
4.evaluate the potential and attractiveness of each segment. 5. Select target segments - market targeting
6.identify positioning concept within each segment. 7. Select and develop the appropriate positioning concepts - product positioning
8. Develop marketing mix strategy - marketing mix
Good segment - requirements:
Is measurable
Is accessible
Is substantial - cost effective niche marketing vs mass retailing
Is unique - can be distinguished from other markets
Appropriate - to organisations objectives
Is stable and defensible
Benefits of segmentation
Allows organisation to target a segment or segments of the market and thus be more efficient and effective
Provides foundation for united and focused effort
Organisation can differentiate itself from competition by Better satisfying customers
Identify market opportunities and threats
Factors for assessing market attractiveness
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