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Marketing Strategy

Market Segmentation and Target Strategy

A market consists of people or organizations with wants,money to spend,and the willingness to spend it.However,within most markets the buyer' needs are not identical.Therefore,a single marketing program starts with identifying the differences that exist within a market,a process called market segmentation, and deciding which segments will be pursued ads target markets.

Marketing segmentation enables a company to make more efficient use of its marketing resources.Also,it allows a small company to compete effectively by concentrating on one or two segments.The apparent drawback of market segmentation is that it will result in higher production and marketing costs than a one-product,mass-market strategy.However, if the market is correctly segmented,the better fit with customers' needs will actually result in greater efficiency.

The three alternative strategies for selecting a target market are market aggregation,single segment,and multiple segment.Market-aggregation strategy involves using one marketing mix to reach a mass,undifferentiated market.With a single-segment strategy, a company still uses only one marketing mix,but it is directed at only one segment of the total market.A multiple-segment strategy entails selecting two or more segments and developing a separate marketing mix to reach segment.

Positioning the Product

Management's ability to bring attention to a product and to differentiate it in a favorable way from similar products goes a long way toward determining that product's revenues.Thus management needs to engage in positioning,which means developing the image that a product projects in relation to competitive products and to the firm's other products.

Marketing executives can choose from a variety of positioning strategies.Sometimes they decide to use more than one for a particular product.Here are several major positioning strategies:

1.Positioning in Relation to a competitor

For some products,the best position is directly against the competition.This strategy is especially suitable for a firm that already has a solid differential advantage or is trying to solidify such an advantage.To fend off rival markers of microprocessors,Intel Corp.launched a campaign to convince buyers that its product is