Assignment:
1. From Chapter 7, discuss the concept of segmentation and differentiate between geographic, demographic, behavioral and psychographic segmentation. When are each used and why?
Rosemery: Segmentation divides the market into groups and is a process of collecting and analyzing data on the background knowledge and income of target customers in order to identify and understand actual needs and requirements of potential customers demand.
Segmentation helps develop target marketing by sending messages that appeal to the wants and desires of different segments and then transmit those messages via the appropriate media. The process encompasses the 7p's, product, place, price, promotion, people, physical evidence and process.
Geographic segmentation understands what will sell where and what won't according to the location, the country, state, climate and age of population. Example a market for tank tops would not work in a region where there is winter.
Demographic segmentation determines whether a product needs to be designed for a specific special clientele or mass marketed. The product being marketed is ranked on age, gender, education, income, family size, occupation, culture and religion, language and nationality.
Behavioral segmentation deals with customer loyalty to a particular brand, cost effectiveness and status if the consumer.
Psychographic segmentation deals with the opinions, values and attitudes of the consumer and why they would prefer on product to another.
Colene: Segmentation is the division of the market into smaller segments to reach consumers needs more efficiently and effectively.
Geographical segmentation divides markets into geographical units: nations, regions, states, neighborhoods, or climate.The book used Domino's pizza as an examples for geographical segmentation. They target and focus on each local area differently.
Demographic segmentation divides markets based on age, gender, income, occupation or ethnicity. This targets specific age groups or generations like mini vans for moms.
Psychographic segmentation divides markets by social class, lifestyle or personality. The W Hotels mentioned in the book targe
ts consumers of a certain lifestyle.
Behavioral segmentation divides markets by occasion, benefits or loyalty status. This division targets consumers that frequent certain stores, buy certain brands, and only buy products made by certain companies and their loyalty.
This target marketing evaluates each group or groups to help build a stronger relationship with the consumer.
2. discuss target marketing, with a focus on undifferentiated, differentiated and concentrated marketing. How are these different and why?
Benjamin: Target marketing can be divided into three categories.
Undifferentiated marketing is mass marketing. Consumer differences are ignored, and the marketing instead focuses on reaching the largest number of consumers.
Differentiated marketing is segmented marketing, and the company develops different products and marketing strategies for each segment. An example of this is Toyota with its three separate brands; Lexus, Toyota, and Scion. Within these three brands, there are different types of vehicles marketed to very different segments of consumers.
Concentrated marketing is segmented marketing, except that a company decides to pursue one segment and maximize its share of that segment. This approach would not be taken by Toyota, but by an automotive aftermarket parts company. A company may decide to focus exclusively on offering upgraded off-road parts for Toyota Tacoma 4x4 trucks and nothing else.
Alesha: A target market is a set of buyers who share common needs or characteristics that the company decides to serve (Kotler & Armstrong, 2014, page 203). Targeting can be undifferentiated marketing, micromarketing, or differentiated and concentrated marketing. Undifferentiated marketing, mass marketing, is very broad and targets the whole market by focusing on a common need of consumers, but this type of targeting is usually not as effective as a more focused target market would be (Kotler & Armstrong, 2014, page 203). Billboards are an example. Micromarketing, very narrowly focused, tailors products and marketing programs to suit the preferences of specific individuals and locations (Kotler & Armstrong, 2014, page 205). Build a Bear Workshop for example, targets the individual tastes of each customer who can customize their bear exactly as they want. Differentiated marketing is in between undifferentiated and micromarketing, it targets market segments and designs separate strategies for each (Kotler & Armstrong, 2014, page 204). Allegiant Air from chapter 2 in our books is an example. Instead of trying to compete with other large airlines in major markets, it has found its target market in a large share of the smaller markets. By targeting airports in smaller cities, which the other larger airlines are not doing, it has effectively captured almost the entire market.
Kotler, P., & Armstrong, G. M. (2014). Principles of Marketing (15th ed,). Boston: Pearson