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Target market: Whether it is large or small, the group of customers (people or organizations) for whom a seller design a particular marketing mix is called a target market. Market segmentation: The process of identifying and selecting the target markets is called market segmentation. It can be define as: A process of dividing the total market for a good or service into several smaller groups, such that the members of each group are similar with respect to the factors that influence demand.
Benefits of market segmentation:
Market segmentation is customer oriented, therefore more customer satisfaction. Efficient use of market resources. Best way to compete for small firms with limited resources.
It helps in accurate positioning Conditions for effective segmentation:
Characteristics on which the segmentation is done must be measurable and data describing. The market segment should be accessible through existing marketing institutions.
Segmentation Process. First step: Divide the consumer into two basic categories. Ultimate consumer and business users Ultimate consumer: Who buy goods and services for their own personal use Business users: The business, industry or institutional organizations that buy goods and services for their own use, to resell, or to make other products. Second step: (Segmenting the consumer market) The consumer market may be divided into
Geographic Demographic Psychographic Buying behavior
Segmentation bases for consumer market Geographic Characteristics Examples
Region City or town Urban-rural climate Demographic Income Age gender Family life cycle Social class education occupation religion Ethnic background Rs.10,000 Rs.25,000 Rs.50,000 etc Under6,6-12, 13-19, 20-34 etc Male and female Young, single, married with or without children High upper class, low upper class, middle class, low middle class, upper lower, lower class Illiterate, primary, middle, metric or o level, inter, graduate, post graduate. Professional, clerical, labour, sales, homemaker, unemployed Muslim, nonmuslim Pakistani, no Pakistani North, south, east, west Lahore, Karachi etc Urban, suburban, rural Hot, cold, sunny, rainy and cloudy
Psychological Personality Life style Psychographic behavioral Benefits desired Ambitious, self-confident, aggressive, introverted, extroverted, sociable etc Conservative, liberal, health and fitness conscious, adventuresome VALS, VALS2, LOV Examples vary widely depending on product: appliance—cost, quality, operating life, toothpasteno cavities, plague control, bright teeth, good taste etc Nonuser, light user, heavy user