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Market segmentation is the process of dividing mass markets into groups with similar needs and wants. [2] The rationale for market segmentation is that in order to achieve competitive advantage and superior performance, firms should: "(1) identify segments of industry demand, (2) target specific segments of demand, and (3) develop specific 'marketing mixes' for each targeted market segment ...
In marketing, segmenting, targeting and positioning (STP) is a framework that implements market segmentation. [1] Market segmentation is a process, in which groups of buyers within a market are divided and profiled according to a range of variables, which determine the market characteristics and tendencies. [2]
Traditional market segmentation divides the market into four categories of geographic segmentation, demographic segmentation, psychographic segmentation and behavioral segmentation. [5] This approach works well as it groups various customers into segments that have common needs. It would lead to targeting the segment and positioning the product.
The precise origins of the positioning concept are unclear. Cano (2003), Schwartzkopf (2008), and others have argued that the concepts of market segmentation and positioning were central to the tacit knowledge that informed brand advertising from the 1920s, but did not become codified in marketing textbooks and journal articles until the 1950s and 60s.
Marketing concept: This is the most common concept used in contemporary marketing, and is a customer-centric approach based on products that suit new consumer tastes. These firms engage in extensive market research, use R&D (Research & Development), and then use promotion techniques. [46] [47] The marketing orientation includes:
The marketing mix is the set of controllable elements or variables that a company ... market segmentation, ... Definition/Explanation/Concept Typical Marketing ...
Micro-segmentation on the other hand requires a higher degree of knowledge. While macro-segmentation put the business into broad categories, helping a general product strategy, micro-segmentation is essential for the implementation of the concept. “Micro-segments are homogeneous groups of buyers within the macro-segments” (Webster, 2003).
Once the segmentation has been carried out, target markets selected and the positioning strategy developed, the marketer can begin to shape the marketing mix (or marketing program) around the needs, wants and motivations of the target audience. [18]