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SEGMENTING THE BUSINESS MARKET
Segmentation is a technique for dividing a market into homogeneous identifiable sub-units, in order that the individual needs of buyers and potential buyers can be easily satisfied. Thus, it is about the division of a mass market into distinct groups that have common characteristics and needs. This is done in Consumer marketing.
Segmentation is the process of dividing a target market group into subsections that can then be communicated with through specific communication channels and key messages.
Geographic Segmentation Based on Location
Geographic segmentation is used to identify business target markets based on where the businesses are located. In some cases, business marketers will be attempting to appeal to a very local market segment, such as cleaning services, for instance.
Segmentation by Size
Business to business, or B2B, marketers sometimes choose to target potential business customers based on their size.
Size might be measured in terms of number of employees or in terms of annual sales. Larger companies may represent the potential for more significant sales, while smaller companies hold value by virtue of the fact that there will be many more of them to target as potential customers.
Size will also become an issue in determining how to best connect with these organizations and which individuals within the organizations to target for communications. In small companies, for example, this task will be much more straight-forward; in larger companies, it can be challenging to identify the key decision-makers accurately.
.Segmentation by Industry
Industry segmentation may be used by marketers who are selling products with specific appeal in certain industry segments. For instance, companies that make specialized computer components will want to identify companies that use the components and then segment these companies into a targeted group for communications and outreach.
Different industry segments may also have specific needs and challenges that can be addressed through key messaging in communications. Industry segmentation also holds an advantage in that there are a multitude of industry-specific trade associations that can be used to connect with these audiences
Marketing Strategy: Product Decision
Product is the first 'P' of Marketing Mix Marketing strategy is about achieving your marketing objectives through proper analysis of the marketing mix namely namely:
1. Product
2. Price
3. Place
4. Promotion
PRODUCT
Each element of marketing mix affects the other and the proper combination of these four elements (4Ps) is the key to the success of any marketing process.
Out of all these elements, the first and the foremost is 'Product'.
It is a major carrier of consumer value. It constitutes the core of the offer made by the firm.
It is a set of complex tangible and intangible attributes, manifested through product function, features, packaging, color, price, marketer's image and services which buyer may accept as offering.
To achieve market leadership, firms must offer products of superior quality that provide unsurpassed customer value.
Product
– The first of the Four Ps of marketing is product.
A product can be either a tangible good or an intangible service that fulfills a need or want of consumers.
Whether you sell custom pallets and wood products or provide luxury accommodations, it’s imperative that you have a clear grasp of exactly what your product is and what makes it unique before you can successfully market it.
Price
Once a concrete understanding of the product offering is established we can start making some pricing decisions. Price determinations will impact profit margins, supply, demand and marketing strategy. Similar (in concept) products and brands may need to be positioned differently based on varying price points, while price elasticity considerations may influence our next two Ps.
Promotion
A product and a price now it is time to promote it. Promotion looks at the many ways marketing agencies disseminate relevant product information to consumers and differentiate a particular product or service
Promotion includes elements like: advertising, public relations, social media marketing, email marketing, search engine marketing, video marketing and more. Each touch point must be supported by a well-positioned brand to truly maximize return on investment.
Place
Often you will hear marketers saying that marketing is about putting the right product, at the right price, at the right place, at the right time. It’s critical then, to evaluate what the ideal locations are to convert potential clients into actual clients. Today, even in situations where the actual transaction doesn’t happen on the web, the initial place potential clients are engaged and converted is online.
4 TYPES OF PRODUCT CLASSIFICATION
Convenience Goods
Shopping Goods
Specialty Goods
Unsought Goods
Convenience Goods
Like the Crest toothpaste example, convenience goods are products that consumers' purchase repeatedly and without much thought.
Once consumers choose their convenience goods' brand-of-choice, they typically stick to it unless they see a reason to switch — such as an interesting advertisement that compels them to try it, or mere convenience at the checkout aisle.
These products include toilet paper, soap, toothpaste, shampoo, milk, and other necessities that people buy repeatedly.
To market a convenience good, you want to consider that most people will impulse buy these products. Placing your products near the checkout line at a store could be a good idea for these products — which is why you will often find candy and gum at the front of a store. Since most convenience goods are low-price, pricing and discounting is not a major factor. One may not switch my toilet paper brand just to save a few cents. For convenience goods, brand recognition is key, consumers want to implement widespread campaigns to spread awareness of your company if possible.
Shopping Goods
-Shopping goods are commodities you likely think of when you hear the word "shopping".
They might be higher-end items like cars or houses, or smaller items like clothing and electronics.
Consumers typically spend more time conducting research, comparing prices, and chatting with salespeople when they are looking to purchase shopping goods.
These are more one-off purchases and are typically more important and higher economic-impact products compared to toilet paper or soap.
For instance, while you will buy toilet paper repeatedly for the rest of your life, you'll likely only purchase a house a few times at most. And, since it's an expensive and important purchase, you'll spend a good amount of time deliberating on it, attending different open houses, speaking with various retailers, and comparing pros and cons of your final selection.
To market a shopping goods product, then, consumer want to invest in content that helps persuade your buyer that your product is worth it. It is important that the marketing materials demonstrate how product differs from the competition, and the unique value-add it provides consumers. This will vary depending on the industry and product, but ultimately, marketing shopping goods entails helping consumers understand why they should choose your product over others in the marketplace
Specialty Goods
A specialty good is the only product of its kind on the market, which means consumers typically don't feel the need to compare-and-contrast or deliberate as much as they would with other products.
A good example of this is iPhones. Consumers purchasing new iPhones for years, and have not paused to consider other smartphone models — not because an iPhone is an "impulse" buy, but because of the brand recognition and unique quality that the consumer feel getting from an iPhone.
It. is the same reason people buy Mercedes. There is not anything else on the market like it. For this reason, if the company is marketing a specialty good, they do not necessarily need to spend too much time convincing consumers that your product is different from competitors.
They already know its different. Instead, the company should focus on constantly innovating on its previous products and producing the "next best thing". This will ensure customers to remain loyal to the company’s brand. For instance, if Apple stopped making impressive improvements on their iPhones and promoting new features, consumer might consider switching brands. But since they have continued to impress me over the years, consumers continued to purchase from them.
Unsought Goods
a product that people aren't typically excited to buy, and also do not buy on impulse.
Good examples of unsought goods include fire extinguishers, batteries, or life insurance. People will typically buy an unsought good out of a sense of fear or danger.
For instance, consumers do not go on the market looking for the "new and best" fire extinguisher. Consumers only purchase one due to the fear of a potential fire.
Alternatively, some unsought goods, like batteries, are bought simply because the old ones ran out.
When marketing an unsought good, company must focus on reminding consumers of the existence of your product, and convincing consumers that purchasing your product will leave them with a better sense of security
PRODUCT MIX
A product mix is also called product assortment, which is the set of all products and items a particular seller offers for sale.
A product mix for any organization has got 4 properties: Length, Breadth, Depth and Consistency
Businesses continuously make important decisions about their range of products based on marketing research.
Product decisions include whether to develop new products and how to manage existing products. Many companies introduce new versions of products either frequently or once in a while. Sometimes they remove the old products or develop new features to the existing products.
These activities involve managerial strategies and policy making with respect to the company’s products. Clear understanding of product mix concepts helps in making such strategies..
PRODUCT MIX AND PRODUCT LINE
Product Mix and Product lines are two expressions used in connection with the range and variety of the products of a firm.
Product line is a group of products that are closely related. Why? Because they satisfy the similar type of needs.
They are sold to the same customer group and they are marketed through similar distribution channels.
