In the business field, marketing is one of the activities assisting in profiting a single company. The buyers are too many, greatly dispersed, and different in their needs. Therefore, customer driven marketing strategy is being used to see the products or services from the customer’s perspective and communicating the message in customer’s language (Schade, 2007). Basically, customer driven marketing strategy is divided into four major steps: market segmentation, market targeting, positioning and differentiating (Refer to Appendix 1, Figure 1).
The first step is market segmentation. According to Cravens and Piercy (2009), segmenting markets is a foundation for superior performance and it is important to understand buyer’s needs and wants in designing marketing strategy. It is a process of placing the buyers in a product-market into subgroups and it needs to be considered early in the development of marketing-driven strategy (Cravens & Piercy, 2009). Besides that, Cravens and Piercy also stated that segmentation is a recognized process targeted at finding subgroups of buyers within total market. Dickson and Ginter (1987) claimed that “the opportunity for segmentation occurs when differences in buyers’ demand functions allow market demand to be divided into segments, each with a distinct demand function” (pp. 1-10). Moreover, Kotler and Armstrong (2012) maintained that there are four major segmentation variables for customer markets which are geographic segmentation, demographic segmentation, psychographic segmentation and behavioral segmentation. Coincidently, in Dickson and Ginter’s (2009) and Kotler and Armstrong’s (2012) study, the requirement for an effective segmentation must be actionable, substantial and benefit, identifiab...
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Armstrong, Gary, and Philip Kotler. Marketing: an introduction. 11th ed. Upper Saddle River, NJ: Pearson Prentice Hall, 2013. Print.
Firstly, one of the most important focuses would be given to the target customer as we will need to know more about their taste and preferences. What it is they need and or want. Particular topics covering this area will be, the need for ‘Market segmentation’, identifying a competitive position in the market about to enter in the market and studying consumer behaviour, will all be discussed.
Jobber,D & Ellis-Chadwick, F (2012). Principles and Practices Of Marketing. 7th ed. : McGraw Hill Higher Education. p19-21 & 352-354.
Cravens, D. W., & Piercy, N. F. (2009). Strategic marketing (9th ed.). New York, NY: McGraw-Hill Company.
Many factors should be addressed when defining a target market. These factors include market segmentation, product life cycle, and the four "P's" that make the marketing mix. Market segmentation is the process of dividing a total market into market groups consisting of people who have relatively similar product wants and needs. There are four major segmentation variables: geographic, demographic, psychographic, and behavioral. Geographic segmentation includes world region, country region, city, density, or climate. Demographic segmentation can consist of age, gender, income, occupation, education, race, religion, or nationality. Social class, lifestyle, and personality fall into the psychographic segment. The behavioral segment divides buyers into groups based on their knowledge, attitudes, uses, or responses to a product (Bethel, 2007). Once the market segment is identified, that market can be targeted.
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It has been observed since the inception of Marketing that marketers target to only specific market and how they identify such market. There are certain criteria or base they use to identify the consumers who they would be serving to. Customers do have unique requirements satisfaction levels and aspirations. Some customers however are similar with respect to their requirements of goods and services. In such case if their needs are identified and they can be grouped in quantities of a specific size then it can be segmented. Now each customer group have specific expectations and businesses must cater to the needs of the segmented that has been targeted.
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
Kotler, P. & Keller, K.L., (2009), A Framework for Marketing Management. 4th edition, Pearson Prentice Hall: USA
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Cravens, D. W., & Piercy, N. F. (2009). Strategic marketing (9th ed.). New York, NY: McGraw-Hill.