T5: Part 2 - Target Markets (Segment criteria - segments must score high…
T5: Part 2 - Target Markets
DEFINE: Selecting one or more segmented markets to enter
MUST CONSIDER: Segments overall attractiveness AND company's objectives and resources
Stages of full process
Needs-based segmentation - identify the needs
Segment identificiation - what are the common characteristics of the segment
3. Segment attractiveness - determine if the segment suits the companies overall goals
4. Segment profibility - is it profitable?
Segment positioning - what is the value propositions for this segment?
Segment 'acid test' - 'segment storyboards'
Marketing-mix strategy - cover the 4Ps
Segment criteria - segments must score high on...
Four levels of target market selection:
Multiple segments specialisation
Similar products for different segments
Different products for same segment
Subsegment - niche
Full market coverage (mass marketing)
Differentiated - multiple products to cover the whole market
Undifferentiated - i.e. one general product to serve the whole market
Segment attractiveness can be effected by the threats posed in the segment (Porter, p.260)
Threat of new entrants / low exits
Threats of substitute products, i.e. air for rail
Threat of intense segment rivalry
Threat of buyers' growing bargaining power
Threat of suppliers' growing bargaining power