The division of a market into several smaller groups, each with similar needs.
A group of customers or potential customers who have purchasing power and unsatisfied needs.
The parameters used to distinguish one form of market behavior from another.
- Benefit variables
- Demographic variables
Two Broad sets of Segmentation Variables
Specific charcteristics that distinguish the market segments according to the benefits sought by customers.
- Highlights the unsatisfied needs of customers.
Specific characteristics that describe customers, their purchasing power, their consumption patterns, and other factors.
- Marital status
Few companies engage in all three approaches simultaneously. Small businesses often lack the resources that these strtegies tend to require.
- Unsegmented strategy
- Multisegment strategy
- Single-Segment strategy
Marketing Strategies Based on Segmentation Considerations
A strategy that defines the total market as the target market.
- Assumes that all customers desire the same basic benefit from the product or service.
- Firms develop a single marketing mix- one combination of product, price, promotion, and distribution.
- Competitive advantage must be derived from either a cost- or differentiation-based advantage
Unsegmented Strategy (Mass Marketing)
A strategy that recognizes different preferences of individual market segments and develops a unique marketing mix for each.
A strategy that recognizes the existence of several distinct market segments but focuses on only the most profitable segment.
- Competitive advantage is achieved through a cost- or differentiation-based strategy
- Startup professional
- Probably the wisest strategy for small businesses to use during initial marketing efforts.
- Allows a small firm to specialize and make better use of limited resources.
The Single-Segment Strategy
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