Selecting Target Markets Through Market Segmentation

The market selected by a company as the target for their marketing efforts is critical since all subsequent marketing decisions will be directed toward satisfying the needs of these customers. But what approach should be taken to select markets the company will target?

One approach is to target at a very broad level by identifying the market as consisting of qualified customers who have a basic need that must be satisfied. For example, one could consider the beverage market as consisting of all customers that want to purchase liquid refreshment products to solve a thirst need. While this may be the largest possible market a company could hope for (it would seem to contain just about everyone in the world!) in reality there are no commercial products that would appeal to everyone in the world since individual nutritional needs, tastes, purchase situations, economic conditions, and many other issues lead to differences in what people seek to satisfy their thirst needs.

Because people are different and seek different ways to satisfy their needs, nearly all organizations, whether for-profits (прибуткові) or not-for-profits (неприбуткові), industrial or consumer, domestic or international, must use a market segmentation approach to target marketing. This approach divides broad markets, consisting of customers possessing different characteristics, into smaller market segments in which customers are grouped by characteristic shared by others in the segment.

Segmentation is the process of dividing the market up into smaller groups, with similar needs. Segmentation can be done by breaking down a large market, or by building up from individual customers. For a segment to be viable, it needs the following characteristics:

1. It must be definable.
2. It must be sizeable – large enough to be worth serving. This impliesthat the segment must be measurable.
3. It must be reachable – there must be a promotional medium whichreaches the segment.
4. It must be relevant.
5. It should be homogeneous. This means that the members shouldhave similar needs in terms of what the company has to offer.

A segment represents a group of ideal customers. If, as a marketer, you can develop a detailed mental image of the kind of customer your product will appeal to, the rest of the marketing planning becomes much simpler.

Markets can be segmented in a number of ways. The most common ones (not necessarily in order of usefulness) for consumer markets are:

• Age. • Social class. • Benefits sought.

• Family life stage. • Ethnicity. • Loyalty.

• Geography. • Lifestyle. • Stage in buying process.

• Gender. • Attitudes. • Use occasion.

• Income. • Behaviour. • Frequency of purchase.

In B2B markets, the commonest bases are:

• Geography..• Purchase frequency.

• Industry. • Benefits sought.

• Size of firm.

Remember that these bases are not mutually exclusive. Most firms use several variables to define the segment, because the variables are too broad to define the segment accurately.

Поиск по сайту: