Saturday, April 14, 2007

Identifying market segments and targets

-- Continued...



Sequential segmentation

business buyers seek different benefit bundles based on their stage in the purchase decision process.

1.first time prospects

2. Novices

3.sophisticates



One proposed segmentation scheme classifieds business buyers into three groups, each warranting a different type of selling:

1. price oriented customers (transactional selling) -- wanting value through lowest price

2.solution oriented customers (consultants selling) -- want value through more benefits and advice

3.strategic value customers (price selling) -- want value through the supplier tell investing in purchasing and the customers business



Market targeting


once the firm has identified its market segment opportunities, and it has to decide how many and which ones to target.



Effective segmentation criteria


to be useful, market segments must rate favorably on five key criteria:



Measurable -- the size, purchasing power, and characteristics of the segments can be measured

substantial -- the segments are large and profitable enough to serve

accessible -- the segments can be effectively reached and served

differentiable -- the segments are conceptually distinguishable and respond differently to different marketing mix elements and programs

actionable -- effective programs can be formulated for tracking and serving the segments



Evaluating and selecting the market segments



When evaluating different market segments, the firm must look for two factors: the segments overall attractiveness and the company's objectives and resources.

After evaluating different segments, the company can consider the five patterns of target market selection:

single segment concentration

selective specialization

product specialization

market specialization

full market coverage in paragraph

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