MARKET SEGMENTATION
This is the process of dividing various consumers into classes on basis of similarity of characteristics, selecting any class or classes as the target market and making an effort to the needs of the classes. Through market segmentation, the business person develops a unique market niche for his/her business that will make it different from the competitor.
Demographics – grouping or dividing the market into groups based on such variables as age, marital status, gender, ethnic background, income, occupation, and education. Geographic - dividing a market according to such variables as climate, region, and population density (urban, suburban, small-town, or rural) Psychographic - classifies consumers on the basis of individual lifestyles as they’re reflected in people’s interests, activities, attitudes, and values. Product – benefits of product (what consumers want from use of product e.g. boom washing power or speciality cooking oil etc.) user or nonuser of the product, extent of use of product (heavy, moderate, light). Another basis of segmentation is by industrial user. These are users who buy products or services to use in their own business or make other products.
TARGETING This Involves evaluating each market segment’s attractiveness and selecting one or more segments to enter. It involves segment sizing, segment structural 1. attractiveness, and where company objectives and resources are considered. It involves selecting target 2. market segments. It involves selecting alternatives range from undifferentiated marketing to 3. micromarketing. It involves being socially responsible.
DIFFERENTIATION This is creating superior customer value by actually differentiating the market offering. It means that the marketing mix is distinct from what the competitor is offering. This difference may be based on one important element of the marketing mix, for example an improved product or faster delivery. Differentiation is more obvious to target customers when all of the elements of its marketing mix are fine-tuned to the specific needs of a distinctive market. This makes target customers think of the firm as being in a unique position to meet their needs.
POSITIONING This refers to how customers think about brands in a market. Positioning issues are especially important when competitors in a market appear to be very similar. For example, many people think that there isn’t much difference between one brands of TV from another. But LG wants TV buyers to think “Life is Good” when owning an LG TV set. LG people arrange for their products to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers.
COMPETITIVE ADVANTAGE A competitive advantage is some trait, quality, or capability that allows you to outperform the competition. It gives your product, service, or brand an advantage over others in purchasing decisions. Competitive advantage may come from any or all of the following: 1. Price: Something in your production process or supply chain may make it possible for you to provide comparable value at a lower cost than competitors. 2. Features: You may provide tangible or intangible features that your competitors do not: for example, more colors, better taste, a more elegant design, quicker delivery, personalized service, etc. 3. Benefits: You may provide unique benefits to customers that your competitors cannot match. Benefits are intangible strengths your customer gets when they use your offering. For example, time savings, convenience, increased control, enjoyment, relaxation, more choices, feeling better about oneself, being more attractive, etc.