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Targeting of Segments and Positioning in a Segment

(1) Undifferentiated marketing. The company might decide to ignore market segment differences and go for the whole market with one market offer. This approach focuses on what is common in the needs of consumers rather than on what is different. Product and marketing programmes are designed to appeal to most buyers. Mass distribution and mass advertising are relied on. An example of undifferentiated marketing would be the launch of a new chocolate bar targeted at everyone.

(2) This approach provides cost economies. Production, inventory and transportation costs are kept low by the single product line. Similarly, advertising, market research and product management costs are kept low. However, most modern marketers have strong doubts about this strategy. It is very difficult to develop a product or brand that will satisfy all consumers. Heavy competition will usually be attracted and therefore margins will often be low.

(3) Differentiated marketing. A company may decide to target several segments and design separate offers for each. General Motors tries to produce a car for every ‘purse, purpose and personality’. By establishing a strong position in several segments, consumers’ overall identification with the company will be strengthened and therefore provide a better chance of repeat purchasing. Differentiated marketing typically creates more total sales than undifferentiated marketing. But the production and marketing costs are increased. In some cases, ‘oversegmentation’ can occur and a company may try to broaden its base. For example, the target market for Johnson & Johnson’s baby shampoo was broadened to include adults.

(4) Concentrated marketing. Many countries see a third possibility that is especially appealing when company resources are limited. Instead of going for a small share of a large market, the firm goes for a large share of a submarket. Many examples of concentrated marketing can be found. In computers, Sinclair targeted the bottom end of the home computer market; in cars, Saab focuses on the luxury sports car market; in clothes, Laura Ashley originally targeted a distinct segment of the women’s clothes market.

(5) Through this approach, a strong market position can be achieved, operating costs can be kept low and, if targeted well, the firm can earn a high rate of return on its investment. At the same time, higher than normal risks are involved. The particular market segment can turn sour*; larger competitors may well enter the same segment with many more marketing resources. For these reasons many companies prefer to diversify in several segments.

(6) In terms of application, many factors must be considered when choosing one of the above strategies. When a firm’s resources are limited, concentrated marketing makes the most sense. Undifferentiated marketing is more suited when the product is homogeneous like grapefruit or steel. The product’s stage in its life cycle must also be considered. When a new product is introduced, it is often practical to launch just one version and in that case undifferentiated or concentrated marketing makes the most sense. Differentiated marketing is more applicable to maturer products. Finally, competitors’ marketing strategies are important. It can be suicidal to use undifferentiated marketing when the competitors are actively segmenting the market. Conversely, when the competitors are using undifferentiated marketing, a firm can gain by using differentiated or concentrated marketing.



(7) Some companies produce very similar products (e.g. a number of brands of detergent*) under different names and then position them differently in the same market. Positioning is situating a product in relation to others already on the market by specifying particular attributes. A product can be positioned in the market on its attributes, usage or competitive advantage depending on the research into consumer’s preferences, needs and behaviour.

3. Define the main idea of each paragraph.

 

4. Find among underlined words in the text which fit these meanings:


1.the status or reputation that something or someone has

2.a quality or feature of someone or something

3.trusted

4.consisting of things that are similar or all of the same type

5.to receive money for work that you do

6.the action of recognizing someone that you have seen before

7.to be convenient for someone

8.normal or average and not unusual

9.a small case in which women carry coins, paper money

10.profit

11.very expensive and of the highest quality

12.something that is offered for sale

13.all the money that a business must spend to produce something or provide a service

14.to get or achieve something, usually as a result of a lot of effort


 

5. Mark the following statements TRUE or FALSE. If a statement is false, correct it:

1.Social marketing targets particular consumers according to socio-economic group.

2.Target marketing is concerned with advertising to particular groups of consumers.

3.Differentiated marketing aims to appeal to specifically identified groups of potential users of a product.

4.Undifferentiated marketing is all kinds of marketing techniques used at once.

5.Segmentation strategy is an attempt to divide the total market into specific types of consumers.

6.Product positioning is a way of promoting goods in stores.

7.Concentrated marketing is targeting a particular market segment with what the company believes to be the ideal offer.

8.Differentiated marketing is providing products to meet the needs of different consumer groups in different market segments.

9.Undifferentiated marketing is marketing a product aimed at the widest possible market.

10.Industrial marketing is the marketing of manufactured goods.

11.Consumer watchdogs have become more common especially in several industries and in public sector.

 

6. State in what part of the text the following information is mentioned:

1.There is heavy competition if the company has one product.

2.Companies produce the same products.

3.This marketing has high costs.

4.Companies prefer to work in more than one segment because of rivals.

5.This strategy is right with homogeneous products.

6.The company takes into account the common needs of their consumers.

7.The company has different products for different segments.

8.It is not easy to invent a product that will appeal to most buyers.

9.It’s of great importance to estimate competitors’ strategies.

10.The company is aimed at a large share in a submarket.

11.The introduction of new products requires these strategies.

12.Single products are targeted at everyone.

13.Companies emphasize certain features of their products to position them in the segment.

14.Concentrated marketing gets a strong market position.

15.Costs are low if there is the single product.

16.Strong position of the company provides consumers’ repeat purchase.

17.Concentrated marketing is right with when resources are limited.

18.This kind of marketing has high risks.

19.The company is not interested in the differences of the segment.

20.Similar products have different names.

21.Some companies have limited resources.

22.The product’s life cycle is very important when choosing the strategy.

23.This marketing has more sales.

 

7. Complete the text using these words:

appealing competing developing forecasting dividing

existing minimizing purchasing switching targeting

Market Segmentation

Market segmentation means (1)… a market into distinct subsets of customers with different needs, according to different variables that can play a role in (2)… decisions. These can include geographical, demographic and other variables.

If there is only one brand in a market, it is likely to be positioned in the centre, so as to attract the most consumers possible. (3)… to all groups from the centre with an undifferentiated product gives a company the largest potential market, while (4)… production, inventory, market research and product management costs. A new competitor can either situate a product next to the (5)… one, in a straightforward battle for market share, or to find a corner of the market in order to gain the loyalty of a consumer group not satisfied with the centre brand.

If there are several brands in the market, they are likely to position themselves fairly evenly throughout the space and show real differences to match differences in consumer preference. If, on the other hand, several products are (6)… for the largest centre segment, new entrants onto the market will probably find that smaller segments with less competition are more profitable. In fact, (7)… a particular market segment is often the only realistic strategy for firms with limited resources, although it can be risky, as the segment might get smaller or even disappear, or be attacked by a larger competitor.

At the beginning of a product’s life cycle, companies often produce one version, and attempt to develop demand by undifferentiated marketing, before (8)… to differentiated marketing in the product’s maturity stage. Differentiated marketing involves (9)… several brands, each positioned in a different segment. This obviously maximizes total sales, but equally increases R&D, planning, market research, (10)…, production, promotion, administration and inventory costs.

 

8. Choose the right variant to fill in the gap:

1. Providing products to meet the needs of different consumer groups in different market segments is … marketing.

a) undifferentiated b) concentrated c) differentiated

2. … is situating a product in relation to others already on the market, by specifying particular attributes.

a) placing b) introduction c) positioning

3. … is the status or reputation that something or someone has.

a) place b) position c) standing

4. Showing a difference between things.

a) positioning b) differentiation c) de-positioning

5. Market segmentation is about understanding the needs of customers and, therefore,

how they decide between one … and another.

a) share b) seller c) offer

6. The primary objective of …, therefore, must be how to win and retain the customers

you want to serve.

a) segmentation b) positioning c) differentiation

7. When choosing between competing products and services, customers … the

proposition that meets their needs better than any other.

a) challenge b) select c) appeal

8. Market segmentation is the process of dividing a market into a distinct group of

buyers that require different products or marketing … .

a) mixes b) efforts c) channels

9. A key factor to success in today’s market place is finding subtle … to give a

business the marketing edge.

a) similarities b) features c) differences

9. Complete the sentences choosing the most suitable word from the variants below:


Date: 2015-01-12; view: 3794


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POSITIONING | Quot;Positive" market segmentation
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