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Segmentation and Levels of Segmentation

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  Niche marketing: Concentrating all marketing efforts on a small but specific and well defined segment of the population. Niches do not 'exist' but are 'created' by identifying needs, wants, and requirements that are being addressed poorly or not at all by other firms, and developing and delivering goods or services to satisfy them. As a strategy, niche marketing is aimed at being a big fish in a small pond instead of being a small fish in a big pond. Also called micro marketing. Mass marketing: An attempt to appeal to an entire market with one basic marketing strategy utiliing mass distribution and mass media, also called undifferentiated marketing.!r  he production and distribution of a product intended to be sold to a relatively high  proportion of the population. e.g. #roducts advertised during national television programs may reach consumers throughoutthe entire country. As long as these products are available nationwide, advertising to such a huge demographic can be a good marketing strategy. Consumers seeing products advertised on television commercials are often more likely to choose them over similar store products that weren't promoted. $howing television viewers the actual product and communicating benefits % such as getting sparkling white teeth by using &rand  toothpaste % has been shown to increase sales of advertised products. As the commercials are repeated, the repetition helps to create brand recognition. Undifferentiated marketing: market coverage strategy whereby a company ignores differences within a market and attempts to appeal to the whole market with a single basic product line and marketing strategy. (ndifferentiated marketing relies on mass distribution and mass advertising, aiming to give the product a superior image in the minds of consumers. )t is cost effective because there is only one product line to be produced, inventoried, distributed, and advertised. Also the absence of segmented market research lowers the costs of consumer research and product management. $ee also concentrated marketing differentiated marketing* mass market.!r (ndifferentiated +arketing(ndifferentiated marketing treats all buyers, or potential buyers, as a homogeneous group. Another term for undifferentiated marketing is mass marketing. ather than  producing different marketing strategies for different segments of society, or even different products for different groups, undifferentiated marketing attempts to reach all  potential buyers using one marketing strategy. )n this way, undifferentiated marketing treats all segments of the population the same, and the strategy is to use one approach thataims to appeal to as many people as possible. he &enefits of (ndifferentiated +arketing  A company can benefit from undifferentiated marketing in several ways. his marketing strategy does not require the same level of research into consumer tastes as other types of marketing. -hile differentiated and concentrated marketing are both researchintensive approaches, undifferentiated marketing requires an understanding of the largest possible segment of the population on a basic level to achieve mass appeal. )n addition, undifferentiated marketing allows a company to appeal to a much wider audience than other marketing strategies.(ndifferentiated +arketing /rawbacks he downside to this marketing approach is that it makes the assumption that everyone is more or less the same. (ndifferentiated marketing assumes a high degree of similarity in  peoples0 tastes, motivations for buying and expectations. his can lead to a significant amount of overgeneraliation in a society where people tend to have different tastes. As a result, undifferentiated marketing strategy may fall flat or even turn off certain groups of  people, thus becoming counterproductive. e.g.Print Advertising: +againes, flyers and coupon campaigns can be differentiated or undifferentiated. 1or example, an ad placed only in a magaine for mothers of preschoolers that claims the  product makes mom0s life easier has a concentrated or niche market. #rint advertising canalso reach the masses when an ad is more general in nature, such as a soft drink ad that says the product is refreshing. his type of mass market ad would go into several different types of magaines and would target more than one segment of the population. Individual Marketing:  )ndividual marketing is defined as tailoring products and marketing programs to the needs and preferences of individual customers. )n this marketing strategy, products are customied to suit each person. individual marketing can be called as customied marketing or onetoone marketing.individuals can directly talk with the suppliers or the manufacturers for fulfilling their wants for the required product.&ecause of the rapid growth in the information technology sector people can log on to the websiteslooking for the information and evaluations of products or service offers for customiing their  products.they can design their own products also.best example for individual marketing isdell.in dell website you can customie your owm laptop ar even you can design your owm laptop based on your requiments. e.g. !ne company that has been using this strategy for over a decade now is &uildA&ear -orkshop. -hen thinking about which company succeeds using individual marketing, &uildA&ear came to me. -hen ) brought my 2yearold sister to the workshop, she had a difficult time making decisions. hat's because &uildA&ear has over a hundred furry friends to select from, numerous possible outfits and accessories for the stuffed animals, and multiple different sounds to place into the bear along with its stuffing. 3oung boys and girls get excited when going to the workshop because these furry friends are tailored to their liking. A typical customer walks in, selects an animal, chooses a sound to be  placed in it, stuffs the animal, grooms it, then selects an outfit 4or multiple5 for his6her  new friend. After creating a furry friend, a customer names it and receives a unique birth certificate. 7very customer walks out with a friend that is different from the friends of  previous and future customers. 7very customer customies a friend to their preferences, and every customer is more satisfied this way. Local marketing: 8ocal marketing is the customiation of marketing mix variables to thestore level based on consumer, competitor, and store characteristics. Segmentation:Geographic segmentation: Collecting and analying information according to the physical location of the customer or other data source. 9eographic segmentation is often used in marketing, since companies selling products and services would like to know where their products are  being sold in order to increase advertising and sales efforts there. $ee also demographic segmentation emographic: +arket segmentation based on differences in demographic factors of different groups of consumers. )t is one of the five common segmentation strategies, and aims to define specific niches that require custom promotion.!r $egmentation generally divides a population based on variables. hus demographic segmentation too has its own variables such as Age, gender, family sie, income, occupation, religion, race and nationality./emographic segmentation is one of the most commonly used forms of segmentation as it is clearly identifiable. he variables used for /emographic segmentation help divide a large population into specific customer groups.7ach and every individual has an age, gender, income etc. hus for mass marketing, this  becomes one of the best ways to diversify individuals. his also helps in analying lots of data in shorter time for market research as well as for promotions.$ome of the variables of /emographic segmentation are:5 Age ; !ne of the first variable of demographic segmentation is age. his is because consumer needs and wants change with their age. A youngster might want a mobile  phone but an earning professional will want a communicator with lots of extra features such as email and file editing support. hus even though the basic functionality of the  product is same, the wants are different. his is the primary reason for using age as a variable in demographic segmentation.<5 8ife cycle stage ; Closely connected to age, the life cycle stage of a consumer group defines what will be the need of that particular customer. 7xample ; a toddler will need  infant food, a child will need dolls and toys, a middle age customer will need insurance and investment plans and finally an old age person might need retirement plans. his demographic segment cannot be said as an =Age> segment because these customers are inspecific phase of their =8ife>.?5 9ender ; +en are from mars and women are from @enus. $o naturally their  preferences differ. -here men might want the latest in technology, women might desire the latest in 1ashion 4point is debatable nowadays5 here are several products which are gender focused such as deodorants, clothing, accessories, footwear and even automobiles.-omen are gaining acceptance even in under developed economies and this has seen an increasing focus on women along with men as customers.5 )ncome ; &+-, +ercedes, 1errari, these cars have customers who are much more quality and luxury conscious then others. $o what would be the target group of such  productsB he high income customer. $imilarly, in 1+C9, you will see many brands and  products which are targeted towards the $ec & and $ec C customers. hus, income too can be used to define a customer group from a population. hese customers are generally divided as $ec, $ec & and $ec C customers depending on their income and purchasing  power.5 eligion, ace, Nationality ; 7ver seen the advertising of a mass brand like Coca colaor #epsi. Although these two brands have their own global advertising, but they also havespecific advertising in each country which they enter. he messages of these advertisements are completely different and are based on the local customs, religions as well as nationality. -ith the tremendous increase in international business, there is also an increase in the usage of demographic segmentation on the basis of religion, race and nationality. Ps!chographic: $egmentation is used mainly to target a certain group from within a population. #sychographic segmentation is one which uses peoples lifestyle, their activities, interests as well as opinions to define a market segment. #sychographic segmentation is quite similar to behavioral segmentation. &ut psychographic segmentation also takes the  psychological aspects of consumer buying behavior into accounts. hese psychological aspects may be consumers lifestyle, his social standing as well as his A)!. /o refer more to Activities, interests and opinons.Dere aresome factors which help divide a population based on psychographic segmentation.8ifestyle ; here are various segments which have become popular in retail but one of the most popular segments is the lifestyle segment. 7veryone has different clothing habits based on their lifestyle. he customer might be school going, college going, office going or other. hus by lifestyle we mean, where does the customer stand in his life cycle.
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