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Methods of Market Segmentation
Segmentation and the marketing mix
Academic discussion on market segmentation
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Whenever people go for shopping, they usually see items segmented for particular consumers. This is not just about making the items in place but also a norm of marketing, guiding and attracting consumers to the segmented items. With that being said, we'll talk about terms marketing and segmentation, in business context there is what we called market segmentation that refers to the “division of a market into homogenous groups which will respond differently to promotions, communications, advertising and other marketing mix variable,” argues Dudovskiy (2012). In addition Lannuzzi (2014) explains market segmentation as a streamline of business marketing strategy by dividing broad-based target market to sub groups of consumers with devised marketing methods that is appealing to each group.
Definitions above mentioned on marketing strategy, associated with marketing segmentation that is also set with
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Segmentation can also be done through variables; Geographic, Demographic, Psychographic and Behavioral Segmentation, or segmenting international markets (Dudovsky, 2012). Kotler (1999) was cited in Dudovsky (2012) suggesting that international market can also be segmented by geographic location, grouping of countries or sub-cultural segmentation.
To explain the difference of market segmentation in two IKEA stores in two different countries. I discuss IKEA in Saudi Arabia and IKEA in China.
China and Saudi Arabia basically have a clear end consumer distinction. I will shed light on market division criteria based on Psychographic and Behavioral, and Cultural segmentation for the two countries. Psychographic and Behavioral segmentation refer to the sub-dividing of international market base on nationals social class, lifestyle, personality, consumer attitude, and product impact (Dudovsky, 2012).
Sub-Cultural
Segmentation variables can be classified into four major classes; geographic, demographic, psychographic and behavioural. The use of these categories either individually or in combination assists companies to identify and establish market segments which is relevant to the product or service they are offering. This in turn helps these organisations to evaluate the relevant segments to choose the pertinent target market.
Terrell, E. (n.d.). Market Segmentation. (Business Reference Services, Library of Congress). Retrieved April 6, 2014, from http://www.loc.gov/rr/business/marketing/
Dickson, P. R., & Ginter, J. L. (1987). Market segmentation, product differentiation, and marketing strategy. Journal of Marketing, 51(2(April 1987)), 1-10. Retrieved from http://www.jstor.org/stable/1251125
Caroline and Jennifer said that ‘Market segmentation is a crucial marketing strategy. Its aim is to identify and delineate market segments or set of buyers which would then become targets for the company’s marketing plans.’ (Tynan and Drayton, 1987) There are many ways to segment the market, such as age, region, environment, psychology and wages (Hall, Jones and Raffo, 2010).
Segmentation, targeting and positioning are the fundament of modern marketing (Proctor, 2002, p. 188, as cited in Harris and Schaefer, 2015).
To begin with, it is crucial to appreciate the meaning of segmentation and targeting because these two terms lay the foundation for this report. Consequently, segmentation is dividing a market, into groups of consumers with homogenous traits in order to provide each group with the desired product. What is the meaning of targeting? It is where an enterprise evaluates every segment with an objective of identifying segments with promising business opportunities. Considering the nature of the product in question, it sufficed to mention that liquor- filled chocolates are to be sold to adults.
According to Kotler et al 2013 market segmentation is defined as dividing a market into smaller segments of buyers with distinct needs, characteristics or behaviours that might require separate marketing strategies or mixes. As per the industry data which we were operating we used different theories to segment the market one of them is STP process. In this method whole market is sub divided into different segments based on three activities these are segmentation, targeting and positioning. From the market information in case study we identified similar groups of consumer under market segmentation activity. For example market E had consumers travelling between mini hub to medium city that had a new and growing market. While targeting the market we identified which group of consumers to aim for instance market D had major university and service sectors. Lastly in the product and brand positioning we created a concept so as to appeal the target market by running as discount airline. One of the approaches for market segmentation according to Kotler et...
Market segmentation is marketing strategy that use by the company that we choose is Nova. Nova involves in dividing the broad target market into subsets of consumer. The consumers that have needs and priority, Nova can implement the market segmentation to them. Nova use the market segmentation is to identify the target customer. In addition, Nova use provides supporting data for positioning to achieve the marketing plan objective.
Market segmentation is the procedure of breaking up the market into smaller sets of customers who respond in a similar way to a given set of marketing incentives (e.g. price, product features) or, otherwise, groups of consumers with similar choices or requirements, which may be based on demographics, such as gender or age; geographics, such as by country, rustic/civilian areas; psychographics such as lifestyle; or behavioral factors such as brand loyalty. Market targeting means focusing your market efforts on one or some crucial segments that comprise consumers whose requirements and wishes most closely correspond to your product or service offerings. It may be the key to catch the attention of new business, growing your sales, and making your business successful. Market targeting is essential because by concentrating your efforts at particular sets of
Market segmentation means dividing the market into distinct groups that have common needs and will respond similarly to marketing action. Each segment must be unique, have common needs, and respond in a similar manner to marketing efforts. Target market is the group of potential customer that has been selected by business to focus its marketing efforts towards. This is the group the business wants to sell its products/services to. Positioning refers to the image created in the minds of customer of its product or brand. It is a perception created in the minds of the consumer relative to that of its competitors.
6) Establish the following six positioning variables for at least any three of your market segments:
age & lifestyle, geography and gender. Dibb, S, et al (2005). Companies can choose one or several variables, as Appendix I shows segmentation can be grouped into four categories demographic, geographic, psychographic and behaviourist. Demographers study aggregate population characteristics such as the distribution of age and gender, fertility rates, migration patterns and mortality rates. Marketers rely on these demographic characteristics because they are often closely linked to customer’s needs and purchasing behaviour, also can be measured. Dibb, S, et al (2005). For example Tesco have two market segments, first one is customers looking for value and second one customers looking for quality. Tesco (2014). Geographic segmentation is clustering people according to postcode areas and census data. Dibb, S, et al (2005). Tesco will need to take the different languages spoken into account when labelling goods. Tesco has opened Metro and Express stores to make it easier for customers to shop. (http://stores.tesco-careers.com/). Marketers sometimes use psychographic variables such as personality characteristics, motives and lifestyles to segment markets. Dibb, S, et al (2005). Tesco use age and gender segmentation to offer different products and use different marketing approaches for different age and gender groups. Tesco (2014). A programme called the Stanford Research Institute’s Value and Lifestyle Programme (VALS) surveys consumers to select groups with identifiable values and lifestyles. Initially VALS, identified three broad consumer groups, which are outer-directed, inner-directed and need-driven consumers. Behavioural segmentation means dividing the market into groups based on consumers behaviour towards products. Purchase behaviour can be a useful way of distinguishing between groups of customers, giving marketers insight into the most appropriate marketing mix. For example brand loyal
Marketing, while including the business of selling and advertising products and services, branches out into (encompasses) many other different areas. The scope of marketing also extends to the development of a product or service pre-sale. In order for a product or service to exist, there must be a want or need from the consumer before the product or service is established and designed in order to satisfy the consumer. The existence of a global, international market compels companies to be selective in what they offer to their choice markets; this is why segmentation has been very effective and beneficial to companies selecting their segment of market.
By definition, strategic marketing is a firm’s ability to concentrate a limited amount of resource on an opportunity that has deemed to have the highest potential to increase sales, thereby creating a sustainable competitive edge over rivals (Brooksbank & Taylor 2007). Fundamentally, each aspect of marketing has the potential to improve or affect the performance of other marketing facets. Hence, creating a proper coordination of a firm’s activities makes it possible to eliminate unnecessary activities that interfere with efficient profit maximization processes. Strategic marketing explores ways that each of the marketing processes will reinforce each other for the best output. More importantly, strategic marketing makes each department to work
One business function that would address Tiger’s innovation needs is Marketing, specifically marketing segmentation. The formal definition of marketing segmentation is the process of grouping customers in markets with some heterogeneity into smaller, more similar or homogenous segments. (Dibb et al., 2016, p.204) Essentially this means dividing a market of potential customers based on different characteristics, interests and needs which correlates to how similarly they will respond to different marketing strategies. Target markets can be grouped in various ways, for example they could be separated based on demographic variables (Age, Gender, Ethnicity), geographic variables (Country, Region, City), psychographic variables (Personality, Lifestyle,