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   A write up about Market Segmentation, Targeting and Positioning for Market Advantage In partial fulfilment Of the requirements In Principles of Marketing Submitted by Group 3:  Market Segmentation Market segmentation is a crucial marketing strategy. Its aim is to identify and delineate market segments or sets of buyers which would then become targets for the company's marketing plans. The advantage to marketing management is that this technique divides total demand into relatively homogeneous segments which are identified by some common characteristics. These characteristics are relevant in explaining and in predicting the response of consumers, in a given segment, to marketing stimuli. Market Segmentation can be defined as the process of breaking down all consumers into groups of potential buyers with similar characteristics or grouping consumers by some criteria, such that those within a group will respond similarly to a marketing action and those in a different group will respond differently. Levels of Market Segmentation Market segmentation represents an effort to increase a company’s targeting precision. It can be carried out at four levels: mass, segment, niche and micromarketing. In mass marketing, the seller engages in the mass production, mass distribution, and mass promotion of one product for all buyers. Henry Ford epitomized this marketing strategy when he offered the Model-T Ford to all buyers; they could have the car “in any color as long as it is black.” Coca -Cola also practiced mass marketing for many years when it sold only one size Coke in a 6.5-ounce bottle.   A market segment consists of a large identifiable group within a market. A company that practices segment marketing recognizes that buyers differ in their wants, purchasing power, geographical locations, buying attitudes, and buying habits. At the same time, though, the company is not willing to customize its offer/communication bundle to each individual customer. The company instead tries to isolate some broad segments that make up a market. For example, an auto company may identify four broad segments: car buyers seeking basic transportation, those seeking high performance, those seeking luxury, and those seeking safety. Segment marketing offers several benefits over mass marketing. The company can create a more fine-tuned product/service offer and price it appropriately for the target audience. The choice of distribution channels and communications channels becomes much easier. And the company may face fewer competitors if fewer competitors are focusing on this market segment. Market segments are normally large identifiable groups within a market — for example, nonsmokers, occasional smokers, regular smokers, and heavy smokers. A niche is a more narrowly defined group, typically a small market whose needs are not being well served. Marketers usually identify niches by dividing a segment into subsegments or by defining a group with a distinctive set of traits who may seek a special combination of benefits. For example, the sema, and heavy smokers with emphysema who are overweight. Micromarketing consists of Local marketing and Individual marketing. In local marketing, target marketing is increasingly taking on the character of regional and local marketing, with marketing programs being tailored to the needs and wants  of local customer groups (trading areas, neighborhoods, even individual stores). Thus Citibank provides different mixes of banking services in its branches depending on the bank’s neighborhood demographics. A nd Kraft helps supermarket chains identify the cheese assortment and shelf positioning that will optimize cheese sales in low-income, middle-income, and high-income stores, and in different ethnic communities. In comparison, Individual marketing, the ultim ate level of segmentation leads to “segments of one,” “customized marketing,” or “one -to- one marketing.” The prevalence of mass marketing has obscured the fact that for centuries consumers were served as individuals: The clothier tailor-made the suit, the cobbler designed shoes for the individual, and so on. And much business-to-business marketing today is customized, in that a manufacturer will customize the offer, logistics, and financial terms for each major account. It is the new technologies — specifically computers, databases, robotic production, and instant communication media such as e-mail and fax — that are permitting companies to consider a return to customized marketing, or what is called “mass customization.” Mass customization is the ability to pre pare on a mass basis individually designed products and communications to meet each customer’s requirements.  Bases for segmenting
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