THE TARGET MARKETING PROCESS
Because few, if any, products can satisfy the needs of all consumers, companies often develop different marketing strategies to satisfy different consumer needs. The process by which marketers do this is refered to as target marketing and involves four basic steps:
1. Identifying markets with unfulfilled needs
2. Segmenting the market
3. Targeting specific segment
4. Market Positioning.
1. Identifying markets with unfulfilled needs
Target market identification isolates consumers with similar lifestyles, needs and the like, and increase our knowledge of their specific requirements. Marketers competing in nearly all product and service categories are constantly searching for ways to segment their markets in an attempt to better satisfy customers’ needs.
2. Market Segmentation
Market segmentation is “dividing up a market into distinct groups that 1) have common needs and 2) will respond similarly to a marketing action. (Berkowitz and Kerin).
Marketers attempt to identify broad classes of buyers who have the same needs and will respond similarly to marketing actions.
Marketers may use one of the segmentation variables or a combination of approaches.
2.1 Base for Segmentation
2.1.1 Geographic Segmentation
Markets are divided into different geographic units. Consumers often have different buying habits depending on where they reside. These units may include nations, states, counties or even neighborhoods.
2.1.2 Demographic Segmentation
Dividing the market on the basis of demographic variables such as age, sex, family size, education, income and social class.
2.1.3 Psychographic Segmentation
Dividing the market on the basis of personality and/or lifestyles.
The determination of lifestyles is usually based on an analysis of the activities, interests, and opinion (AIOs) of consumers.
3. Targeting Specific Segment
The outcome of the segmentation analysis will reveal the market opportunities available. The next phase in the target marketing process involves two steps:
3.1 Determining how many segments to enter.
3.2 Determining which segments offer the most potential. The firm must examine the sales potential of the segment, the opportunities for growth, the competition, and its own ability to compete. In other word, the firm must examine the most attractive segment.
4. Market Positioning
Positioning has been defined as “the art and science of fitting the product or service to one or more segments of the broad market in such a way as to set it meaningfully apart from competition.”
