ENTR 20000 Chapter 11: Unique marketing issues

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To succeed a firm must know who its customers are and how to reach them. Market segmentation-the process of studying the industry in which a firm intends to compete to determine the different potential target markets in that industry. Important because a new firm only has enough resources to target one market segment. Homogeneity of needs and wants appears within the segment. Heterogeneity of needs and wants exists between the segments. Differences within the segment should be small compared to differences across segments. The segment should be distinct enough so that its members can be easily identified. The segment should be large enough for the firm to earn profits. It should be possible to determine the size of the segment. Most firms target a niche market within the segment. Niche market-a place within a market segment that represents a narrow group of customers with similar interests. A firm"s market position is defined by its products and services.

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