chap 2 cb
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Understanding Consumer Behavior and Market Segmentation
Chapter 2
Market SegmentationAlso known as mass marketing or
undifferentiated marketing.
“Producing a single product and offering it to
all consumers with a single marketing
program”.
Opposite of segmentation.
Characteristics Offering standard product.
Little or no change from competition.
Heavy use of mass promotion.
Distinguishing the product as being superior.
Products are as per the choice of producers
not consumers.
Market Segmentation“Dividing the market into different
segments.”
Today is the “Age of Diversity.”
All consumers are different.
So are their demands.
Selecting the right segment is the key to
success.
Characteristics Viewing market as being made up of small
segments.
Homogeneous within the segment.
Heterogeneous with other segments.
Different products are produced for different
people.
E.g. General Motors, P&G etc
Benefits of Market Segmentation Know what consumers WANT.
Fewer and similar consumers.
Detailed knowledge of consumers
characteristics.
Consumer database is also built and used.
Results in more profits.
Niche Marketing is also an example.
Costs of Market Segmentation Shorter production.
Higher manufacturing costs.
Higher R&D costs.
Higher promotional costs.
Cannibalization.
Criteria for Effective Segmentation1. Identifiable and Measurable.
2. Accessible
3. Substantial
4. Responsive
Performing Market Segmentation1. Define the Problem.
2. Select a segment basis.
(In advance or Natural Groupings)
3. Choose a set of Descriptors.
4. Select a Sample of Consumers.
5. Collect data on segment descriptors from
sample of consumers.
6. Form Segment based on chosen consumer
descriptors.
7. Establish profiles of segments.
8. Translate result into marketing strategy.
Demographic Characteristics and Market Segmentation
Demography is the study of human
population statistics. Like;
Age
Size
Gender
Occupation
Income etc.
Assignment no 1
What are the Demographic Characteristics of Pakistani Market? Explain in detail.
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