Market Segmentation and Positioning

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Market segmentation is the process of dividing a market into distinct subsets ofconsumers with common needs or characteristics and selecting one or more segments to target with a distinct marketing mix (Bruwer, Li and Reid, 2002). Segmentation is important because since customer needs differ there is a need to generate separate offers for each segment to better satisfy customers. Also, segmentation can help identify a diversity of market opportunities (Dibb and Simkin, 1991) and build up sales leading to higher profits. Moreover, it makes it practical for Almarai to acclimatize the marketing mix for precise target markets which helps to better satisfy the customer needs Furthermore, with segmentation further decision can me made such as what type of marketing activities are required, where to advertise, etc. Additionally, it helps Almarai have a better chance to increase their market shares, makes marketing effort more effective and economical, maintainable customer relationships in all stages of customer life cycle and it also influences innovation. Almarai recognises they cannot serve all the segments in a market effectively and therefore try to target. It has to evaluate and analyse the segments and decide on which ones it should serve- targeting segments. Targeting is the process of selecting high-priority segments that are most likely to respond to marketing communication programs (Duncan, 2002). It is important since unfilled market gaps and market opportunities can be identified and if accurately identified may lead to high profits. Also, it assists to sell more of products with fewer marketing resources. Moreover, it becomes easier to determine where and how to market the product effectively, easily to concentrate on the benefits and features of the product, etc.
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