Organizations that sell to consumer and business markets recognize that they cannot appeal to all buyers in those markets, or at least not to all buyers in the saint way. Buyers are too numerous, too widely scattered and too varied in their needs and buying practices. Companies vary widely in their abilities to serve different segments of the market. Rather than trying to compete in an entire market, sometimes against superior competitors, each company must identity the parts of the market that it can serve best. Segmentation is thus a compromise between mass marketing, which assumes everyone can be treated the same, and the assumption that each person needs a dedicated marketing effort.
Few companies now use mass marketing. Instead, they practise target marketing - identifying market segments, selecting one or more of them, and developing products and marketing mixes tailored to each. In this way, sellers can develop the right product for each target market and adjust their prices, distribution channels and advertising to reach the target market efficiently. Instead of scattering their marketing efforts (the 'shotgun' approach), they can focus on the buyers who have greater purchase interest (the'rifle' approach).
Figure 9.1 shows the major steps in target marketing. Market segmentation means dividing a market into distinct groups of buyers with different needs, characteristics or behaviours, who might require separate products or marketing mixes. The company identifies different ways to segment the market and develops profiles of the resulting market segments. Market targeting involves evaluating each market segment's attractiveness and selecting one or more of the market segments to enter. Market positioning is setting the competitive positioning for the product and creating a detailed marketing mix. We discuss each of these steps in turn.
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