Management and Organizational Studies 1021A/B MOS consumer behavior chapter 6

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Western University
Management and Organizational Studies
Management and Organizational Studies 1021A/B
James O' Brian

Chapter 6 segmentation and targetingMarket segmentationThe essence of market segmentation target markets and product positioning is based on 2 important facts y Consumers have diverse needs and a single product cannot satisfy everyone y Companies have finite amounts of money and it needs to be spent efficiently on those consumers who are most likely to purchase the product A market segmentation means a piece of the market There are 2 main market segmentsy The consumer market consists of goods services and ideas that a person can purchase for their own personal use y The business market involves products that are purchased either to run a business or to be used as a component in another good service Market segmentation involves aggregating prospective buyers into groups that have common needs and respond similarly to marketing programs Product differentiation involves positioning a product apart from the competition in the eyes of consumersy Forms of market segmentationApproaches companies can take to segment the market 1 Mass marketing exists in a limited capacity due to the competitiveness of the market and the need for the marketers to specifically address consumer needs with their offerings The marketing of a product to the entire market with no differentiation at all 2 Segment marketing most common form of segmentation followed by large companies Designing different products and service to meet the needs of different target groups 3 Niche marketing the type of market segmentation that allows a company to focus its effort on a limited segment in the market Individualized marketing involves customizing offers and in some cases products that fit 4 individual needs key to successful product differentiation and marketing segmentation strategies is finding the The ideal balance between satisfying a customers individual wants and being able to do this profitably
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