MOS Textbook Notes
Chapter 6 Segmentation and Targeting
Market Segmentation
The essence of market segmentation, target markets, and product positioning is
based on two important facts:
o Consumers have diverse needs and a single product cannot satisfy
everyone
o Companies have finite amounts of money, and it needs to be spent
efficiently and effectively on those consumers who are most likely to
purchase the product
In the marketing world there are two main market segments:
o The consumer market consists of goods, services, and the ideas that a
person can purchase for their own personal use
o The business market involves products that are purchased either to run a
business or to be used as a component in another good or service
Market segmentation involves aggregating prospective buyers into groups that
have common needs and respond similarly to marketing programs
Product differentiation is to position their products apart from the competition
in the eyes of the consumer
Forms of Market Segmentation
Mass Marketing
o Mass marketing involves a product being marketed to the entire market
with no differentiation at all
Ex: natural gas, propane
Segment Marketing
o Most common form
o Segment marketing involves designing different products and services to
meet the needs of different target groups
Ex: General Mills and Kellogg’s
o In the business-to-business market, the market is often segmented by the
needs of key accounts
Niche Marketing
o The type of market segmentation that allows a company to focus its efforts
on a limited segment in the market is called niche marketing
Individualized Marketing
o New technology has welcomed individualized marketing as a
segmentation option for marketers
Involves customizing offers and, in some cases, products that fit
individual needs
o Internet ordering, flexible manufacturing, and marketing processes have
made individualized market segments possible, tailoring goods or services
to the tastes of individual customers
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