Now-a-days companies recognize that they can not appeal to all buyers in the marketplace or at least not to all buyers in the same way. Buyers are too numerous, too scattered, and too varied in their needs and buying practices. Moreover, the companies themselves vary widely in their abilities to serve different segments of the market.
There are 4 steps of designing customer driven marketing strategy. They are described below:
(i) Market Segmentation:
Buyers in any market differ in their wants, resources, locations, buying attitudes, and buying practices. Through market segmentation, companies divide large heterogeneous markets into smaller segments that can be reached more efficiently and effectively with products and services that match their unique needs. Market segmentation is of two types:
A) Segmenting consumer market: There is no single way to segment a market. A marketer has to try different segmentation variables, alone and in combination, to find the best way to view the market structure. There are four segments of consumer market:
1. Geographic Segmentation: It calls for dividing the market into different geographical units such as nations, regions, states, provinces, cities or even neighborhoods.
ECONO DX mainly does their business in villages. They are also supplying their pens in big cities of Bangladesh but, in few amounts.
2. Demographic Segmentation: It divides the market into groups based on variables such as age, gender, family size, family life cycle, income, occupation, education, religion, race, generation and nationality. Demographic factors are the most popular bases for segmenting customer groups. One reason is that consumer needs, wants and usage rates often vary closely with demographic variables. Another is that, demographic variables are easier to measure than most other types of variables.
As example, old people will buy ECONO DX because; memorable events are related to it. Another example is lower income people uses ECONO DX pen as it is cheap.
3. Psychographic Segmentation: It divides buyers into different groups based on social class, life style or personality characteristics. People in the same demographic group can have very different psychographic makeups. Mainly middle and lower class people are the target customers of ECONO DX.
4. Behavioral Segmentation: It divides buyers into groups based on their knowledge, attitudes, usage or response to a product. This grouping is done depending on occasion, benefit sought, user status, user rate, loyalty status etc. As example, patriotic people will want to buy ECONO DX Ball pen because, it is an old brand and they are using this brand may be from the time of liberation war.
B) Segmenting Business Market: Consumer and business markets use many of the same variables to segment their markets. Yet, business marketers also use some additional variables, such as customer operating characteristics, purchasing approaches, situational factors, and personal characteristics. By going after segments instead of the whole market, companies can deliver just the right value proposition to each segment served and captured more value in return.
When ECONO DX was first introduced in the market, the owner of the company was very cleaver to grab the market for his product. He made a contract with BD government that- in all government official sectors ECONO DX will be the only ball pen to be used as official accessory.
Requirements for effective segmentation:
Clearly there are many ways to segment a market, but not all segments are effective. To be useful, market segments must be- 1. Measurable: The size, purchasing power and profiles of the segments can be measured. 2. Accessible: The market segments can be effectively reached and served. 3. Substantial: The market segments are large or profitable enough to...