Steps in Segmenting Markets. Segmenting Criteria Potential for increasing profit Potential for...
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![Page 1: Steps in Segmenting Markets. Segmenting Criteria Potential for increasing profit Potential for increasing profit Similarity of needs of buyers within.](https://reader035.fdocuments.in/reader035/viewer/2022072006/56649f555503460f94c7913e/html5/thumbnails/1.jpg)
Steps in Segmenting Steps in Segmenting MarketsMarkets
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Segmenting CriteriaSegmenting Criteria
Potential for increasing profitPotential for increasing profit Similarity of needs of buyers within a Similarity of needs of buyers within a
segmentsegment Difference of needs of buyers among Difference of needs of buyers among
segmentssegments Potential of a marketing action to Potential of a marketing action to
reach a segmentreach a segment Simplicity & cost of assigning potential Simplicity & cost of assigning potential
buyers to segmentsbuyers to segments
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Step 1: Group Potential Buyers Step 1: Group Potential Buyers into Segmentsinto Segments
Divide market into 2 categoriesDivide market into 2 categories Buying situationsBuying situations Customer characteristicsCustomer characteristics
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Buying SituationsBuying Situations
Benefits soughtBenefits sought Usage Rate – quantity consumed Usage Rate – quantity consumed
during a period of timeduring a period of time 80/20 Rule – 80/20 Rule – conceptconcept that suggests that suggests
80% of sales are obtained by 20% of its 80% of sales are obtained by 20% of its customerscustomers
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Customer CharacteristicsCustomer Characteristics
DemographicsDemographics PsychographicsPsychographics GeographicsGeographics
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Step 2: Group Products into Step 2: Group Products into CategoriesCategories
Grouped so buyers can relateGrouped so buyers can relate
Example: Fast FoodExample: Fast Food BreakfastBreakfast SnackSnack DinnerDinner DesertDesert
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Step 3: Develop a Market Step 3: Develop a Market Product GridProduct Grid
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Step 4: Select Target Step 4: Select Target MarketsMarkets
Criteria:Criteria: Market sizeMarket size Expected GrowthExpected Growth Competitive positionCompetitive position Cost of reaching segmentCost of reaching segment Compatibility with organization's Compatibility with organization's
objectives and action planobjectives and action plan
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Step 5: Take Marketing Actions Step 5: Take Marketing Actions to Reach Target Marketto Reach Target Market
Develop and execute an action planDevelop and execute an action plan
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Product PositioningProduct Positioning
How customers perceive the productHow customers perceive the product Use a Perceptual MapUse a Perceptual Map