The marketing concept puts customer needs at the centre of the organization’s decision making. Increased competition, better informed and educated consumers and changing patterns of demand have given rise to the need for effective segmentation. Market segmentation and strategies of targeting and positioning recognize that within the total market for a product, demand will differ to cater for specific tastes, needs and quantities of customers.
A market that is characterized by differing preferences is termed ‘heterogeneous’. Segmentation attempts to break down this heterogeneous market into distinct subsets or segments, with customers who share similar demand preferences. Effective segmentation is achieved when customers sharing similar patterns of demand are grouped together giving rise to ‘homogeneous’ demand. The fact that most markets are made up of heterogeneous demand segments means that companies have to decide which segments to serve. Varied patterns of demand require that marketers develop specific marketing mixes (i.e. product, price, promotional and channels appeals) aimed or targeted at specific market segments.
The advantages of target marketing are:
▫ Marketing opportunities and ‘gaps’ (i.e. sectors of unfulfilled demand) in a market may be more accurately identified and appraised.
▫ Product and market appeals (through the marketing mix) can be more finely tuned to the needs of the potential customer.
▫ Marketing effort can be focused on the market segment(s) that offer the greatest potential for the company to achieve its objectives.
2. Put the questions logically according to the text and answer them:
1.Give the definition of homogeneous market.
2.What do various patterns of demand require to develop?
3.Give the definition of heterogeneous market.
4.What is the difference between homogeneous and heterogeneous market?
5.What caused the need for effective segmentation?
6.What does marketing out at the centre of decision making?
7.What are the main advantages of target market?
8.What happens to demand within the total market for a product?
Date: 2015-01-12; view: 934