Customer capabilities: Should we serve customers needing many or few services? Purchasing Approaches 7. Purchasing-function organization: Should we serve companies with highly centralized or decentralized purchasing organizations? Power structure: Should we serve companies that are engineering dominated, financially dominated, and so on?
First-time prospects 2. Novices 3. Look for Competitive Advantages. Target marketing sometimes generates controversy and concern. Disadvantaged and vulnerable can be targeted. Cigarette, beer, and fast-food marketers have received criticism in the past. Internet has come under attack because of the loose boundaries and lack of control in marketing practices. Open navigation menu. Close suggestions Search Search.
User Settings. Skip carousel. Carousel Previous. Carousel Next. What is Scribd? Explore Ebooks. Bestsellers Editors' Picks All Ebooks. Explore Audiobooks. Bestsellers Editors' Picks All audiobooks. Explore Magazines. Editors' Picks All magazines. Explore Podcasts All podcasts. Difficulty Beginner Intermediate Advanced. Explore Documents. Industry Segmentation and Competitive Advantage.
Uploaded by VikasSharma. Document Information click to expand document information Description: gdgdgd. Did you find this document useful? Is this content inappropriate? Report this Document. Description: gdgdgd.
Flag for inappropriate content. Download now. Related titles. Carousel Previous Carousel Next. Jump to Page. Search inside document. Jaba Bokuchava. Pratik Shetty. Arnab Bhattacharya. Ravi Jaggi. Neniel Dumanjog. Gohil Satyendrasinh. Concentration of marketing energy is the essence of all marketing strategies and market segmentation is the conceptual tool to help in achieving this focus. Need can be described as basic human requirements.
People need food, air, water, clothing, and entertainment. These needs become wants when they are directed to specific objects that might satisfy the need. An American needs food but wants hamburger, French fries and a soft drink. Cartwright is of the opinion that need is something that people cannot do without; a want is the method by which people would like the need to be satisfied. Demands are wants for specific products backed by an ability to pay Kotler, Market segmentation was first put forward in the middle of s by Wendell.
Smith, an American professor of marketing. Lamb Segmentation is the process of dividing the market into groups of customers or consumers with similar needs. The more closely the needs match up, the smaller the segment tends to be, 45 P a g e www.
Segmentation allows marketers to identify distinct groups of customers whose behaviours significantly differ from others. This allows firms to adjust their marketing mix, to cater to particular needs of different market segments. Segment congruence analysis usually progresses in the following manner: 1. Traditional dimension-reducing techniques such as factor and cluster analysis are used to identify a number of segmentation bases batteries of variables.
These segmentation bases can then serve as categorical variables and a multidimensional, contingency table is formed. Various categorical data analysis tests are carried out on the multi-way table to assess the nature and extent of associations among its dimensions. A segmentation base is identified as the distinguished base and a model is developed for predicting this base from other possibly external variables. The present paper highlights the definition and major basis of market segmentation.
This research paper is broadly divided in to four parts. First part deals with the steps of market segmentation and its basis. Second part deals with the benefits of market segmentation. Third part includes the theoretical and empirical evidences in favor of market segmentation. Fourth and the last part discuss about the conclusion.
Steps in Market segmentation According to Charles W. It may be a market in which the firm has already occupied a new but related market or product category, or a totally new one. This step requires managerial insight, creativity and market knowledge.
There are no scientific procedures for selecting segmentation variables. After choosing one or more bases, the marketer must select the segmentation descriptors. Descriptors identify the specific segmentation variables to use.
This information can then be used to rank potential market segments by profit opportunity, risk, consistency with organizational task and objectives, and other factors which are important to the company. This step is not a part of the segmentation process but a natural result of it. The marketing mix has been described as product, distribution, promotion and price strategies which are used to bring about mutually satisfying relationships with target markets.
Roger Best proposes a framework for implementing a market segmentation strategy. He suggests a set of sequential steps to be taken in a needs-based segmentation process the primary benefit of needs- based segmentation is that segments are created around specific customer needs.
The goal is to determine what observable demographics and behaviors differentiate one segment from another in order to make need-based market segmentation actionable.
Steps in Segmentation Process Description Group customers into segments based on similar 1 Needs-Based Segmentation needs and benefits sought by customer in solving a particular consumption problem. For each needs-based segment, determine which 2 Segment Identification demographics, lifestyles, and usage behaviors make the segment distinct and identifiable. Using predetermined segment attractiveness criteria, 3 Assess Segment Attractiveness determine the overall attractiveness of each segment.
Determine segment profitability net marketing 4 Evaluate Segment Profitability contribution. For each segment, create a "value proposition" and 5 Segment Positioning product-price positioning strategy based on that segment's unique customer needs and characteristics.
Test the attractiveness of each segment's positioning 6 Segment "Acid Test" strategy. Expand segment positioning strategy to include all 7 Marketing-Mix Strategy aspects of the marketing mix: product, price, promotion, place, and people. Market segmentation strategy is an adaptive strategy.
It consists of the operation of the market with the purpose of selecting one or more market segments which the organisation can target through the development of specific marketing mixes that adapt to particular market need. Thus marketers who successfully segment the overall market and adapt their products to the needs of one or more smaller segments stand to gain in terms of increased profit margins and reduced competitive pressures. Small businesses, in particular, may find market segmentation to be a key in enabling them to compete with larger firms.
Many management consulting firms offer assistance with market segmentation to small businesses. But the potential gains offered by market segmentation must be measured against the costs, which—in addition to the market research required to segment a market may include increased production and marketing expenses. Markets and the customers who make up those markets are not homogeneous Claycamp and Massy, ; Smith, Wendell Smith suggested that segmentation, the division of a market into groups of customers who share certain characteristics or propensities toward a product or service, might be an effective way for an organization to manage diversity within a market.
Since that time, a rich literature has developed suggesting techniques and bases upon which a single domestic market might be effectively broken into actionable customer segments. While there is a large literature which focuses on the criteria that can be used for segmenting a market, far less attention appears to have been paid to the accompanying requirements for what Kotler terms effective segmentation. Thomas argued that any proposed segmentation should pass four tests, namely with reference to measurability, accessibility, stability and substantiality.
However, there are differences in the number and types of tests. Kotler et al omits stability and uniqueness but includes action ability. Each test is variously described as a requirement or condition for establishing segment viability. The rationale for each test is re-examined and substantiality is shown to be unique, requiring a more precise definition The formula - segmentation, targeting, positioning STP - is the essence of strategic marketing.
Market segmentation is an adaptive strategy. It consists of the partition of the market with the purpose of selecting one or more market segments which the organization can target through the development of specific marketing mixes that adapt to particular market needs. But market segmentation need not be a purely adaptive strategy: The process of market segmentation can also consist of the selection of those segments for which a firm might be particularly well suited to serve by having competitive advantages relative to competitors in the segment, reducing the cost of adaptation in order to gain a niche.
This application of market segmentation serves the purpose of developing competitive scope, which can have a "powerful effect on competitive advantage because it shapes the configuration of the value chain.
According to Porter, the fact that segments differs widely in structural attractiveness and their requirements for competitive advantage brings about two crucial strategic questions: the determination of a where in an industry to compete and b in which segments would focus strategies be sustainable by building barriers between segments Porter, Through market segmentation the firm can provide higher value to customers by developing a market mix that addresses the specific needs and concerns of the selected segment.
Stated in economic terms, the firm creates monopolistic or oligopolistic market conditions through the utilization of various curves of demand for a specific product Category Ferstman C. This is an expanded application of the Microeconomic theory of price discrimination, where the firm seeks to realize the highest price that each segment is willing to pay. In this case the theory's reliance on price is Segmentation as a process consists of segment identification, segment selection and the creation of marketing mixes for target segments.
The outcome of the segmentation process should yield "true market segments" which meet three criteria: a Group identity: true segments must be groupings that are homogeneous within segments and heterogeneous across groups. In addition, Gunter recommends considering the stability of market segments over time and different market conditions. Most techniques of market segmentation rely only on descriptive factors pertaining to purchasers and are not efficient predictors of future buyer behavior.
The author proposes an approach whereby market segments are delineated first on the basis of factors with a causal relationship to future purchase behavior.
The belief underlying this segmentation strategy is that the benefits which people are seeking in consuming a given product are the basic reasons for the existence of true market segments. Despite the well-documented benefits which segmentation offers, businesses continue to encounter implementation difficulties.
This raises important concerns about the cause of these problems and how they might be overcome. This paper states that When planning the approach, it is important to think about segmentation in three stages: before, during and after. This highlights the questions which should be addressed at each stage. In particular, it is helpful to maintain an awareness of segmentation success factors. This research paper tries to the answers of the above stated questions with the help of available literature related to the segmentation.
Benefits of market segmentation: 3. Increasing competition makes it difficult for a mass marketing strategy to succeed. Customers are becoming more diversified and firms are constantly differentiating their products relative to competitors. When the focus is on segmented markets, the company's marketing can better match the needs of that group. Market segmentation allows firms to focus their resources more effectively, and with a greater chance of success.
Marketing, product and brand managers are continuously being asked to increase their return on investment. They are constantly searching for new information about their markets, and new ways to approach them. This is where market segmentation comes in. Companies who segment their markets match their strengths and offerings to the groups of customers most likely to respond to them. Finding, understanding and focusing on the needs of your best customers can make you a market leader.
Market segmentation is a proven way of improving profitability. By focusing on individualized sub groups, you're better able to meet their needs and gain higher market share and profits. Theoretical and empirical evidences in favor of market segmentation: There are many factors which can be responsible for market segmentation traditional as well as modern or new.
Amandeep singh reveals in his study that earlier demographic factors were considered as best basis of segmentation but they are no longer effective for segmentation in FMCG sector. This study shows that purchasing of FMCG products specially personal care products is indifferent of age, educational level.
But there is an effect of gender and educated and non-educated consumers on the purchase routine of personal care products. It means there is a need for developing more effecting marketing segmentation basis. This study is related to only one industry may not be applicable to others. But it is rightly proved that demographic which are considered as most effective attribute that influence the purchase of consumer not powerful enough in today life. Wells, Shing Wan Chang, Jorge Oliveira in their study present an idea that benefit sought are more powerful basis of brand choice.
They also reveal the idea that demographic attributes are not very effective in case of brand choice and in price selection. The demographic variables of interest were age, gender, household size, occupation, education and level of income. Results of this study shows the demographic influence on choice of retail outlet is partial with household size, education and income having a significant effect on the choice of retail outlet selected.
This study shows that some of the demographical factors like education, income and household size effect the choice of retail outlet and definitely the choice of brands also Salma Mirza,
0コメント