marketing strategy chap 2

7/27/2019 Marketing Strategy Chap 2

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STPD Strategies


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Market segmentation strategy involves dividing the market into groups,

where individuals have similar needs and wants for services andproducts. It could also be a segmentation of people on the basis ofbehavior, culture, and economic status.

It is defined as, "Process of defining and sub-dividing a large

homogenous market into clearly identifiable segments having similarneeds, wants, or demand characteristics".

Strategies for Market SegmentationHow a market is segmented is based on certain variables. Variables usedfor segmentation include; behavioral, demographic, psychographic, andgeographical differences.


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Why Segment a Market?Before marketing the products or services, one needs tounderstand their customers, and find ways and means to satisfytheir wants. This is imperative to stay ahead of the competitionand build the brand. This is done through extensive marketresearch. Although it is not possible to satisfy individual needs

and understand all of them, a clearly defined marketsegmentation strategy will help create a market to cater togroups of individuals that will make economic sense to massproduce and distribute. The concept of target marketsegmentation strategy also falls under this blanket, except theformer recognizes and understands the diversity of customersand provides them with products and services that suit their

specific requirements. A successful market strategy strives tounderstand different segments and its different needs; works onthe exhibited common wants; and responds immediately.


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Segmenting people according to their lifestyleand values, and how they translate intoconsumption or purchases of products orservices is what psychographic segmentation is

all about. How one's interest, opinions, values,attitude, and the activities they perform, affecttheir choices and why a group of people wouldlean towards one product more than others. A

high status would translate into an expensiveflying habit, while a thrift value will translate intoan economy flight.


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Geographical segmentation is done bydividing people (markets) into differentgeographical locations. The country, state, orneighborhood, the king of gentry, climate,

size of a place segmented into size of its agewise population, etc., all play a role indevising market strategies. This helps theproducer and the marketers to understand

what will sell and what won't. For example, amarket for winter wear would definitely notwork in warm regions.


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Demographic segmentation refers to a widestudy of potential customers. While marketing aproduct, many variables like age, gender,education, income, family size, occupation,

socioeconomic status, culture, religion, language,and nationality are taken into account. There aremany instances where such a segmentation hasworked very profitably. This segmentation plays a

vital role in determining whether a product canbe mass marketed or designed for a specificclientele.


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Behavioral segmentation is based on thecustomer's needs and subsequent reaction tothose needs or towards the purchase of intendedproducts and/or services. This study isconducted on all variables that are closely relatedto the product itself, like loyalty to a particularbrand, cost-effectiveness in terms of benefitsand usage, circumstances responsible for thepurchase, whether the customer is a regular, a

first timer, or and has the potential to become acustomer, and whether the readiness to buy islinked to status.


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Target market is nothing but that specific setof audience to whom the productmanufactured is meant to cater to. Targetmarket is more like dividing the vast sea of

customers into smaller segments and usingthe 4Ps of marketing (Product, Price, Placeand Promotion) on this segment effectively toachieve maximum sales and profits.


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Single Segment Strategy: This strategyinvolves the use of only one marketing mixfor one market segment. Usually small scalecompanies with limited budget and resources

opt for this form of target marketing strategy.


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Selective Specialization Strategy: In thisstrategy, several marketing mixes areimplemented in different segments. The sameproduct is marketed differently in different

segments, which is why this target marketingstrategy is also known as differentiatedstrategy.


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Product Specialization: The productmanufactured is customized and thenmarketed, so as to cater to different marketsegments.


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Market Specialization Strategy: In this form of target

marketing, the company first finalizes the market

segment they wish to cater to and then manufacture a

variety of products exclusively for this segment.


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Full Market Coverage Strategy: The companyuses this strategy when they wish to serve themass market. This means a single marketingmix combination can be used or even several

marketing mixes are used to cater tosegments made in this entire market.

marketing strategy chap 2

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