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Market Segmentation

Market Segmentation. The segmentation challenge:. • dividing the market into homogeneous sub-groups. • deciding which dimensions should be used as the base of the segmentation. The motivation to segment:. • reduce the market acceptance risk for the product.

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Market Segmentation

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  1. Market Segmentation

  2. The segmentation challenge: • dividing the market into homogeneous sub-groups • deciding which dimensions should be used as the base of the segmentation

  3. The motivation to segment: • reduce the market acceptance risk for the product • increase marketing efficiency • direct marketing efforts at those who are more likely to accept the product

  4. General Segmentation Strategies Concentration Strategy • serve one segment Multisegment Strategy • serve more than one segment

  5. Bases of Segmentation Geographic Demographic Usage Psychological

  6. Organizational Market Segmentation • Type of Customer • SIC Code • End Use • Common Buying Factors • Buyer Size and Geography

  7. Effectively Segmenting the Market Single-base vs. Multi-base Art or Science? How would you decide?

  8. Effective Segmentation Five Criteria: 1 – clear identification 2 - needs 3 – effective demand 4 – economic accessibility 5 – positive response

  9. The Process of Market Segmentation 1 – identify relevant purchase-decision variables 2 – collect and analyze data to identify potential segments 3 – apply the criteria of a good segment 4 – select one or more segments 5 – develop a plan to reach the desired segment(s)

  10. The Big Picture Segmentation should allow the marketer to present the product to a market that is ready to buy • avoid marketing to customers that are unlikely to buy

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