Market Segmentations
Target markets are groups of individuals that are separated by distinguishable and noticeable aspects. Target markets can be separated by the following aspects:
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- • Geographic segmentations, addresses (their location climate region)
- • demographic/socioeconomic segmentation (gender, age, income, occupation, education, household size, and stage in the family life cycle)
- • psychographic segmentation (similar attitudes, values, and lifestyles)
- • behavioral segmentation (occasions, degree of loyalty)
- • product-related segmentation (relationship to a product)
In addition to the above segmentations, market researchers have advocated a needs-based market segmentation approach to identify smaller and better defined target groups. A seven step approach proposed by Roger Best is as follows:
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- • Select the target audience– the customers are grouped based on similar needs and benefits sought by them on purchase of a product.
- • Identify clusters of similar needs- demographics, lifestyle, usage behaviour and pattern used to differentiate between segments.
- • Apply a valuation approach- market growth, barriers to entry, market access, switching, etc. are used.
- • Test the segments- A segment storyboard is to be created to test the attractiveness of each segment’s positioning strategy.
- • Modify marketing mix- expanding segment positioning strategy to include all aspects of marketing mix.
Read more about this topic: Target Market
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