market segmentation

Examples of market segmentation in the following topics:

• Introduction

  • As you read this chapter, you should develop an understanding of the following key marketing concepts:
  • the important role marketing can play in the success of an organization
  • understand the primary tools available to marketers and how they are used

• Marketing Data Types

  • Although industrial market segmentation is quite different from consumer market segmentation, both have similar objectives.
  • The process of segmentation is distinct from positioning (designing an appropriate marketing mix for each segment).
  • Improved segmentation can lead to significantly improved marketing effectiveness.
  • Distinct segments can have different industry structures and thus have higher or lower attractiveness Once a market segment has been identified (via segmentation), and targeted (in which the viability of servicing the market intended), the segment is then subject to positioning.
  • We segment the market according to the occasions.

• Discussion questions and references

  • How does marketing contribute to the creation of a competitive advantage?
  • What is the role of marketing in each stage of this process.
  • Dictionary of Marketing Terms, Peter D.
  • Bennett, Ed., American Marketing Association, 1988 p. 54.
  • Burnett, "The Macromarketing/Micro marketing Dichotomy: A Taxonomical Model," Journal of Marketing, Summer. 1982 pp. 11-26.

• Differential

  • In a theoretical market with perfect information, perfect substitutes, and no transaction costs or prohibition on secondary exchange (re-selling) to prevent arbitrage, price differentials can only be a feature of monopolistic and oligopolistic markets, where market power can be exercised.
  • However, product heterogeneity, market frictions, or high fixed costs (which make marginal-cost pricing unsustainable in the long run) can allow for some degree of differential pricing to different consumers, even in fully competitive retail or industrial markets.
  • Price differentiation requires market segmentation and some means to discourage discount customers from becoming resellers and, by extension, competitors.
  • The boundary set up by the marketer to keep segments separate is referred to as a rate fence.
  • First, the firm must be able to identify market segments by their price elasticity of demand.

• The Target Market

  • The next step in identifying a target market is to divide the entire market into smaller portions, or market segments—groups of potential customers with common characteristics that influence their buying decisions.
  • Demographic segmentation divides the market into groups based on variables that include the following:
  • Geographic segmentation divides a market according to such variables as climate, region, and population density (urban, suburban, small-town, or rural).
  • Behavioral segmentation divides consumers by such variables as attitude toward the product, user status, or usage rate.
  • Companies selling technology-based products might segment the market according to different levels of receptiveness to technology.

• The Marketing Concept

  • The marketing concept states that an organization achieves goals by knowing the needs and wants of target markets and delivering the desired satisfactions.
  • The marketing concept centers on market orientation.
  • The marketing orientation is perhaps the most common orientation used in contemporary marketing.
  • The marketing concept is a business philosophy that holds that long term profitability is best achieved by focusing the coordinated activities of the organization toward satisfying the needs of a particular market segment(s).
  • Market orientation is implementation of the marketing concept, which is a particular business philosophy.

• Addressing Market Needs

  • Examples of markets include: Physical retail markets, such as local farmers' markets, shopping centers and shopping malls Non-physical internet markets Ad hoc auction markets Markets for intermediate goods used in production of other goods and servicesLabor markets and international currency and commodity markets Stock markets, for the exchange of shares in corporations Artificial markets created by regulation to exchange rights for derivatives that have been designed to ameliorate externalities, such as pollution permits.
  • Illegal markets such as the market for illicit drugs, arms, or pirated products
  • Market segmentation is the division of the market or population into subgroups with similar motivations.
  • It is widely used for segmenting the various differences within the market: geographic, personality, demographic, technographic, use of product, psychographic, and gender.
  • In this case, one would have to derive the figures from the number of potential customers, or customer segments.

• Modern Trends in Marketing

  • Modern trends in marketing include relationship marketing, business or industrial marketing, and societal marketing.
  • Modern trends in marketing include relationship marketing, business or industrial marketing, and societal marketing .
  • Also known as industrial marketing, business marketing is at times called business-to-business marketing, or B2B marketing.
  • Marketing is taking the entrepreneurial lead by finding market segments, untapped needs, and new uses for existing products; and by creating new processes for sales, distribution, and customer service.
  • Modern trends in marketing include relationship marketing, industrial marketing, and societal marketing.

• Macromarketing versus micromarketing

  • The division of marketing into macromarketing and micromarketing is a fairly recent one.
  • Initially, the division was a result of the controversy concerning the responsibility of marketing.
  • Should marketing be limited to the success of the individual firm, or should marketing consider the economic welfare of a whole society?
  • Examples of macromarketing activities are studying the marketing systems of different nations, the consequences on society of certain marketing actions, and the impact of certain technologies on the marketing transaction.
  • Micromarketing examples include determining how Nikon Steel should segment its market, recommending how Denver Colorado's National Jewish Hospital in the US should price their products, and evaluating the success of the US "Just Say No" anti-drug campaign.

• Growth through innovation

  • New firms that use technological changes to introduce new products or services as market leaders can gain competitive advantages quickly.
  • The new firms must also possess or acquire the necessary complementary resources for the products and the marketing of them (cf.
  • Sustaining technologies improve existing product-market structures and are generally introduced most effectively by established firms.
  • Disruptive technologies, on the other hand, which enable new applications for new customer segments, tend to be developed and marketed by start-ups.