Market Segmentation †How & Why Essay -- Business Management Studies

Market Segmentation How & WhyAs well as the physical aspect of our store changing we experience to lookat the market differently. Where it was once possible to take a pileit high sell it cheap approach, to achieve broad conjure up to thepopulation we need to cater to the needs of the population. This isachieved by breaking the population into groups and then releasingproducts and services that meet the needs of these groups. This isknown as commit trade. Although we all appreciate the theoreticaleconomies of scale given by mass marketing a single product, there argonfew products that appeal to everyone. by nature this has led to asegmentation of markets as companies that marketed one product, nowproduce a range of products. An example of this is Coca Cola. Originally they sold one product, as well as standard coke we now havediet coke, coke with vanilla, cherry coke, sprite, lilt and many more(prenominal).By accepting that passel have different needs and different shoppingbe haviours we can market ourselves to these segments and attract newcustomers. There are six steps to market segmentation, targeting &positioning and these are1. Identifying qualities for segmenting the market2. Developing profiles of the segments created3. Develop measures of segment attractiveness4. Select target segment5. Develop positioning for each target segment6. Develop marketing mix for each target segment.We have talked about segmenting the market. The question is how do wedo this? There are many ways to segment. You could do this basedupon base income, gender, age, previous purchases etc. In factthere are many ways to identify different market segments and I willbriefly the more commonly used methods.GeographicalIt is possible to segment the population according to Geography,people from the North drink more Irn Bru than those from the South. This can be measured by the success of advertising, an example beingthe Jamie Oliver advert for Sainsburys was less successful in the north.Demographics.This is where segmentation is done by using personal characteristicsof the population Age, gender, income, map in the family life cycleetc.Socio Economic Grouping. This is based upon the occupational status of the head of thehousehold. It is based on the traditional social class governance of thiscount... ...e of segments enables a company to specifically target anaudience within a population. An example would be if I asked all ofyou what you would go out and spend lambert pounds on if I were to giveit to you now. The chances are that everyone would come back with adifferent suggestion. However it I likely that many of you would goand buy clothes, some you would go and buy CDs or DVDs and some ofyou may possibly save the money instead. By grouping people togetherit is possible to target a product at an audience that will wan to buythe product. This should ensure a return on coronation quickly forthe producer and could lead to rapid growth. However a universa lproduct is unlikely to appeal to a wide range of people so it ispossible for a producer to create products for different marketsegments. Today we are going to discuss in more detail Cola drinksand C.Ds as product within our superstores. For the purpose ofillustrating segmentation further it is worth noting that recentdemographic shift of men drinking Diet Coke has been state by CocaCola and their adverts are targeted far less specifically at womanthan the old Diet Coke break ads of the nineties.