Segmentation
Segmentation is dividing the market into subcategories using elements of four different types of variants; demographic, geographic, psycho graphic and behavioral. "Segmentation is based on the fact that consumers have different needs" (Boddy, 2008)
Using demographics is the easiest way to segment a market from factors such as age, gender, race etc. A lot of business use demography as a way to segment the market as a lot of products created are specific to these factors, such as make up for women or nappies for babies.
Geographic are more used by global businesses such as HSBC who even though a global company aim very local in each segment of their market. However its not always global, it can be on a national scale such as selling surf boards to those on the coast.
Psycho graphic segmentation focus's on variants such as lifestyles and personal characteristics, for example those that play rugby. A company would not aim products such as rugby balls or gum shields at a market that have no interest in rugby.
Finally Behavioural factors are another way to segment a market. This is the hardest way to segment the market as to do so in this way the company would first have to collect data in relevance to consumers relationship with their brand and products and how they use and respond to them, where as a lot of demographic data is already collated. but an example of this would probably be best to look at Christmas. Many people may buy a box of Thornton's chocolates for themselves, but some may buy chocolates as gifts. I think this is why Thornton's offer gift rapping as well as just the product.
Targeting
To assess segment attraction businesses can use Doyles 5 factors.
Segment Size- Number of potential customers.
The larger the number of potential customers the better it is.
Segment Growth- Whether the market is growing or shrinking
A growing market or one that has high potential to grow is ideal where as a fully saturated market is not.
Segment Profitability- Porters 5 forces
How much profit can they get from this segment
Current and Potential Competitors- Competitive analysis and 5 forces
By looking at competitors a company can decide if they can compete with the competition and if there it space for them in the market
Core Capabilities- Looking at core competence and using a SWOT analysis
To look at how good are they are at producing the product
Positioning
http://www.youtube.com/watch?v=7e5h8klbdPE&feature=related
Its all about find the perfect place to fit in.
"Product positioning means thinking about a product in the context of the competitive space it occupies in the market, defined in terms of those attributes that matter to the target marketing" (Brassington and Pettitt, 2007). Positioning then is about finding the appropriate area to place there product within a segment.
Companies can use differentiated or undifferentiated strategies when marketing towards market segments.
An undifferentiated strategy would be where a business uses the same marketing mix, such as coca cola do with their products are not really specific to any characteristic. Where as Brewery's such as Greene King use a differentiated strategy in which they use a different marketing mix for different segments of the market. Where they may sell their products cheaper up north they may b e sold quite expensively in the south and midlands.
Finally Behavioural factors are another way to segment a market. This is the hardest way to segment the market as to do so in this way the company would first have to collect data in relevance to consumers relationship with their brand and products and how they use and respond to them, where as a lot of demographic data is already collated. but an example of this would probably be best to look at Christmas. Many people may buy a box of Thornton's chocolates for themselves, but some may buy chocolates as gifts. I think this is why Thornton's offer gift rapping as well as just the product.
Targeting
Targeting is where a company assesses each segment of the market and looks for the most suitable and attractive option to them.
Segment Size- Number of potential customers.
The larger the number of potential customers the better it is.
Segment Growth- Whether the market is growing or shrinking
A growing market or one that has high potential to grow is ideal where as a fully saturated market is not.
Segment Profitability- Porters 5 forces
How much profit can they get from this segment
Current and Potential Competitors- Competitive analysis and 5 forces
By looking at competitors a company can decide if they can compete with the competition and if there it space for them in the market
Core Capabilities- Looking at core competence and using a SWOT analysis
To look at how good are they are at producing the product
Positioning
http://www.youtube.com/watch?v=7e5h8klbdPE&feature=related
Its all about find the perfect place to fit in.
"Product positioning means thinking about a product in the context of the competitive space it occupies in the market, defined in terms of those attributes that matter to the target marketing" (Brassington and Pettitt, 2007). Positioning then is about finding the appropriate area to place there product within a segment.
Companies can use differentiated or undifferentiated strategies when marketing towards market segments.
An undifferentiated strategy would be where a business uses the same marketing mix, such as coca cola do with their products are not really specific to any characteristic. Where as Brewery's such as Greene King use a differentiated strategy in which they use a different marketing mix for different segments of the market. Where they may sell their products cheaper up north they may b e sold quite expensively in the south and midlands.
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