product Target marketing | Market Segmentation

Introduction: Market Target Marketing 

Companies today recognize that they cannot appeal to all buyers in the marketplace in the same way. 

1.Rather than trying to compete in an entire product or service market, each company must identify the parts of the market that it can serve best and most profitably.  

2.Thus, most companies are moving toward market target marketing--identifying market segments, selecting one or more of them, and developing products and marketing programs tailored to each. Also known as STP marketing  

3.The first step is market segmentation  

4. The second step is market targeting  

5. The third step is market positioning  

6. We discuss first two steps in turn.

MarketSegmentation:

 
The process of dividing the total market for a good/ service into smaller groups, each of which tends to be homogenous (or similar) in all significant aspects.

1.One or more segments are selected as the firm’s target market(s). 
2.A separate marketing mix is then developed for each segment or group of segments. This is referred to 3.as ‘Market Segmentation’.

4.Market segmentation involves aggregating prospective buyers into groups that:

5.Have common needs and

6.Will respond similarly to the marketing action.

The groups that result from the market segmentation process are called market segments.