Proctor T (2000) asserts that segmentation is a marketing management tools used by firms to establish a competitive advantage. According to Miklos and Elberse (2006), Market segmentation consists of segregating a market into a number of distinct segments of potential customers; each with different and distinct behaviors, needs and characteristics. Using market segmentation, a firm can more effectively identify and target and fulfill consumer needs. Markets can be segmented either by the benefits customers seek or by an observable characteristic, like age, sex, gender or lifestyle. To illustrate both types of market segmentation, let us look at the market for running shoes, for customer wants, one particular runner may prefer trendy design …show more content…
Global market segmentation is therefore founded on the premise that companies should try to categorize consumers in different countries who share analogous needs and desires. Keegan and Green (YEAR) asserts that the “today’s global companies employ market segmentation to identify, define, understand and respond to customer wants and needs on a worldwide, rather than strictly local basis.” They suggest that only after identifying and analyzing those segments can a company determine if an adapted or standardize marketing mix approach is best fitted to service those needs. Market segmentation therefore provides marketers with the needed information and insights to devise the most effective marketing approach. Global markets can be segmented demographically, where segmentation is based on measureable characteristics of population, such as age, income, population, gender, education and occupation; Psychographic segmentation where people are grouped in terms of their values, lifestyle and attitudes; or by behavior segmentation that looks at current buying patterns and whether or not people buy and use a product and how often and how much they consume. Global markets can also be segmented by benefit and
As discussed in Chapter 3, there are several bases for market segmentation. Because the needs and wants of consumers in various markets differ, there are general indicators that are used to segment markets—geographic demographic, and arguably most importantly, psychographic segmentation. From this, variables like lifestyle, family size and region are used to identify key segments for Virginia Beach. (Spiller, 2012, 88)
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.
Target markets their products to a variety of market segments when speaking about their clothing lines. The top three segments are Age-Related Segments and Gender-Related Segments. Targets approach to development, marketing and advertisement is based on seasons, genders, age in the terms of wants and needs and styles while also staying true to their brand imagine. Target has positioned itself as one of the biggest retailers with a brand imagine that can connect to the consumers, and the ability to develop and deliver high end products that come at an affordable price.
With the processor market for personal computers stabilizing, and the future of Intel being involved in broader markets, Intel will have to develop its market segmentation strategy. For each new market that Intel enters they will have new market segmentation obstacles to overcome. “Market segmentation can be defined as the subdividing of a market into distinct, but possibly overlapping subsets, where any subset may be selected as a market target to be reached with a distinct marketing mix (Desarbo)". Market segmentation strategy success relies on the proper steps along with a throw understanding of these steps. Since being pioneered in 1956 by Wendell Smith, market segmentation still remains to be one of the most pervasive activities in both market academic literature and practice. Ma...
There are many ways to segment the market. Major variables used to segment the
On the other hand, target marketing has taken differing customer needs into serious consideration hence; identifying market segments and produces the best suited product for each target market accordingly. Target marketing not only helps sellers find their marketing opportunities more efficiently; it also helps in satisfying consumers’ needs and directing them to a suitable market according to the spending preferences. Thus, market segmentation is a necessary process in subdividing markets into different segments of promising consumers with comparable characteristics who are most likely to display similar needs. Market segmentation has no doubt emerged as a primary marketing planning mechanism and the foundation for effective overall strategy formulation...
Terrell, E. (n.d.). Market Segmentation. (Business Reference Services, Library of Congress). Retrieved April 6, 2014, from http://www.loc.gov/rr/business/marketing/
In 1956, Wendell Smith published a paper proposing market segmentation as alternative marketing strategy (Smith 1956) and is often credited with popularising the now common place marketing fundamental. Market segmentation is the division of the market into smaller segments of consumers with similar defining characteristics and needs. (Kotler et al, 2013). Marketers will use one or a combination of the main segmentation variables: demographic, geographic, behavioural and psychographic. Psychographic segmentation divides a large heterogeneous market into smaller homogenous markets based on personality traits, values, lifestyle or social class (Kotler et al., 2013). This method allows companies to tailor their product and marketing mix to the group most likely to buy them (Yankelovich and Meer, 2006). Often in combination with demographic variables, companies can use psychographics to position their brand to have appeal to the wants, needs and values of their target market
Segmentation is a marketing strategy that involves separating a wide target market into small groups of customers who share the common need of using or purchasing the product that needs to be marketed. Market segmentation strategies are utilized to identify these groups of consumers and strategies are designed and implemented to make the product or service appeal to them. Support and also the product will be strategically placed in order to successfully achieve the ultimate marketing goal. Businesses and organizations may come up with different type of strategies involving different products and catchy phrases depending on the product or the target segment.
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).
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
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.
In week five we learn about the importance of globalization and how it can help your company’s profits grow. There are many things to look at when selling globally as different cultures need to be looked at differently when making a marketing strategy. If you understand how to market your products to different cultures in different countries you can take advantage of the profits that can be made through globalization.
The international business development has heightened the importance of international market selection (IMS) of companies, especially for their exporting strategy. However, not many companies really comprehend the geographical, social, economic characteristics of foreign countries in comparison with their home countries (Cavusgil, 1985). This fact has challenged many studies to create the optimal approach for IMS. The major question is: Which foreign market should a company enter? Thus, this report focuses on providing a practical consultancy to evaluate and determine its most appropriate foreign markets.
4. Discuss the forces that are leading international firms to the globalization of their sourcing, production, and marketing.