Talking about market segments and target markets.It’s useful to divide your market into segments, and then market to the specific segments you want.
The more narrowly you can define your target market, the more efficient and effective your marketing can be.
Segments can be divided any number of ways
- Age segments
- gender segments
- price segments
- sports segments
- lifestyle segments
People in a particular segment will respond in a similar manner to marketing. A market segment is a relatively homogeneous group of potential consumers.
Product differentiation means changing my marketing mix to distinguish it from what is offered by others or my own other products. Product differentiation is one of the primary methods of targeting different market segments.
Only segment when it generates more revenue.
Types of segmentation:
- One product, many segments — Good stuff. You can design one product to appeal to multiple groups. Those groups may use the product the same way, or have different uses for that product. You can use baking soda for cooking, or stick it in the refrigerator as a deodorant.
- Multiple products, multiple market segments — Have many products, each fitting its own segment or segments. Ford has many car brands and models.
- Segments of One: Mass Customization — Have a product which can be adapted to individual consumers. Computer sales.
Segmentation has a trade-off. CRM vs. synergy. More segmentation means happier customers, but large focused efforts are cheaper.
Steps in Segmenting and Targeting Markets:
- Form Prospective Buyers Into Segments
- Form Products into Groups
- Develop a Market-Product Grid and Estimate Size of Markets
- Select Target Markets
- Take Marketing Actions