Segmentation, Targeting, Positioning

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Principles of Marketing

TARGET MARKETING: Market Segmentation, Targeting and Positioning

Introduction

1. To succeed in today’s competitive marketplace, companies must be customer-centered, wining customers from competitors and keeping them by delivering greater value. a. Sound marketing requires a careful, deliberate analysis of consumers. b. Since companies cannot satisfy all consumers in a given market, they must divide up the total market (market segmentation), choose the best segments (market targeting), and design strategies for profitably serving chosen segments better than the competition (market positioning). 2. Market segmentation is the process of dividing a market into distinct groups of buyers with different needs, characteristics, or behavior who might require separate products or marketing mixes. c. Every market has market segments, but not all ways of segmenting market are equally useful. d. A market segment consists of consumers who respond in similar ways to a given set of marketing stimuli. e. Smart companies focus their efforts on meeting the distinct needs of one or more market segments. 3. Market targeting is the process of evaluating each market segment’s attractiveness and selecting one or more segments to enter. f. A company should target segments in which it can generate the greatest customer value and sustain it over time. g. A company may decide to serve only one or a few special segments, or perhaps it might decide to offer a complete range of products to serve all market segments. h. Most companies enter a new market by serving a single segment, and if this proves successful, they add segments. 4. Market positioning is arranging for a product to occupy a clear distinctive and desirable place in the minds of target consumers relative to competing products. i. In positioning a product, a company first needs to identify possible competitive advantages upon which to build

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