MARKETING 2201 CH 6

Market segmentation: Dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors and who might require separate marketing strategies or mixes

Market targeting: evaluating each market segment’s attractiveness and selecting one or more market segments to enter.

Geographic segmentation: 

• Dividing the market into different geographical units, such as nations, regions, states, counties, cities, or even neighborhoods.

Behavioral segmentation: 

• Divides buyers into segments based on their knowledge, attitudes, uses, or responses to a product.

• Marketers often use multiple segmentation bases in an effort to identify smaller, better-defined target groups. 

• Business marketers also use some additional variables, such as customer operating characteristics, purchasing approaches, situational factors, and personal characteristics.

Segmenting international markets:

• Geographic factors: grouping countries by regions such as Western Europe, the Pacific Rim, South Asia, or Africa

  • Geographic segmentation assumes that nations close to one another will have many common traits and behaviors (not always true)

• Economic factors: grouped by population income levels or by their overall level of economic development.

• Political and legal factors: type and stability of government, receptivity to foreign companies, monetary regulations, and amount of bureaucracy.

• Cultural factors: grouping markets according to common languages, religions, values and attitudes, customs, and behavioral patterns.

Inter market (cross market) segmentation: Segments of consumers who have similar needs and buying behaviors even though they are located in different countries.

Requirements for effective market segmentation:

Measurable: size, purchasing power, and profiles can be measured.
Accessible: can be effectively reached and served.
Substantial: large or profitable enough to serve.

Differentiable: conceptually distinguishable and respond differently to different marketing mix elements and programs
Actionable: Effective programs can be designed for attracting and serving the segments. 

Target market: Set of buyers who share common needs or characteristics that a company decides to serve

Undifferentiated marketing (mass marketing): Firm decides to ignore market segment differences and target the whole market with one offer.

• focuses on what is common in the needs of consumers rather than on what is different.

Differentiated marketing (segmented marketing): Firm targets several market segments and designs separate offers for each.

• companies hope for higher sales and a stronger position within each market segment.

• More expensive 

Concentrated marketing (niche marketing): Goes after a larger share of one or a few smaller segments or niches.

• company achieves a strong market position because of its greater knowledge of consumer needs in the niches it serves and the special reputation it acquires.

• Can market more effectively and efficiently

Micro marketing: practice of tailoring products and marketing programs to suit the tastes of specific individuals and local customer segments. 

• Rather than seeing a customer in every individual, micromarketers see the individual in every customer

• includes local marketing and individual marketing.

Local marketing: tailoring brands and promotions to the needs and wants of local customers.

Individual marketing: tailoring products and marketing programs to the needs and preferences of individual customers.