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Segmentation, The process of grouping customers in markets with some…
Segmentation
Geographic Variables
According to Kotler and Armstrong (2016, p.232) Segmentation Variables need to be:
Measurable- Can measure segments' size, buying power and profits.
Accessible- Can be reached and served.
Substantial- Are large and profitable to serve.
Differentiable- Are distinguished and respond differently.
Actionable- Can be targeted through tailored marketing programmes.
Country, Region, County/ State/ Province, City, Neighborhood, Population Density, Urban/ Suburban/ Rural, Climate.
Targeting
Targeting is when an organization chooses a segment of the market to focus on.
A "Target market" is a particular portion of the total population which is identified (targeted) by the marketer or retailer to be the most likely to purchase its products or services. (American Marketing Association [AMA] Dictionary, 2016.)
Choosing which segments to target will consider:
Customers' needs and wants.
Competitors
The organisations competencies and resources
4 Different types of targeting strategies
Undifferentiated- Making the same offer to the whole market (eg. BBC News)
Differentiated- Making different offers to separate market segments eg. (Clarks shoes)
Concentrated- Focusing on one or a few market segments (niche)
Customised- One-to-one marketing often in a combination with a segment strategy.
Positioning
Positioning is arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers. (Kotler and Armstrong, 2016, p.223)
According to Jobber and Ellis- Chadwick (2013) Successful positioning depends on four factors.
Clarity- Clear, identify the target segment as well as the differential advantage offered.
Consistency- Enduring and becomes associated with an organisations offering.
Credible- Believable.
Competitive- Includes differential advantage over competitors.
Demographic variables
Age, Gender, Ethnicity, Religion, Education, Income, Occupation, Social Class, Life Stage, Family Size.
Psychographic Variables
Personality, Lifestyle, Motivations.
Behavioral Variables
Usage, Benefits, Price sensitivity, Loyalty.
The process of grouping customers in markets with some heterogeneity into smaller, more similar or homogeneous segments. The identification of target customer groups with similar requirements and buying characteristics. (Dibb et al., 2016, p. 204)
