Location: urban, rural, cosmopolitan or closed, multicultural, island, low/uplands
Climate: desert, tropical, four season, seasonal rain, humidity
Advantages
Define the market more precisely
Identifies gaps in the market for exploitation
Minimize selling to consumers who have no intention of buying
Small firms can specialize in one or two target markets
Allows for price discrimination to maximize revenue and profits
Disadvantages
May need product variations to satisfy different segments:
High cost for R&D, varied promotions, and production and inventory
Excessive specialization is dangerous if your segment changes your attitudes or behavior
Using DAMAS for segmentation
Differentiated
Each segment must be unique in response to different elements of marketing mix
Actionable
Business must be able to address the needs of each segment
Measurable
Size and purchasing power must be quantifiable
Accessible
Customer in the segment must be reached in a cost-efficient way
Substantial
Sufficiently large in order to generate profits
Target marketing
Part of market research, comes after market segmentation
Targeting refers to the market segment that a business wishes to sell to
Appropriate marketing strategies are then developed for these target markets
Niche/concentrated
Targets a specific, well-designed segment that requires very specialized product or high luxury item
Undifferentiated/mass market
Ignores segments but targets wide market to maximize volume
Differentiated/selective
Uses different marketing mix for each segment to address differences in perceptions and lifestyles
Market positioning
Basically consumer perception
An analysis that looks at how consumers “perceive” brands (how they are ranked or classified in the eyes of the consumer)
Stages of positioning
Identify the competitive advantage of the product (brand or USP)
Decide on which strengths should be marketed to the segment
Implement the desired positioning by using the appropriate marketing mix
Brand VS. USP (Unique Selling Proposition)
Corporate image is the consumer perception behind a brand
USP is the differentiating factor that makes a company product unique and thus motivates consumers to buy
Product position/perception map
Shows the general market’s or consumers’ perceptions of a product’s or brand’s key aspects in relation to other competitors in the particular market
Mainly uses two variables, such as price and quality, convenience and environment, taste and healthiness, etc.
Uses
Allows businesses to identify any gaps in its product portfolio or in the market, which it can fill with new or existing products
Can be used for targeting strategies
Allows businesses to determine how to place their products more competitively
Can inform businesses if the need to reposition their products arises
Businesses may try to reposition its products according to market/consumer tastes in order to further capitalize on consumer demand without developing entirely new products
Involves modifying the product’s image, features or target market
Limitations
Filling gaps in the market however shouldn’t always be a priority as gaps could exist for reasons, such as generally low demand or low profitability, high barriers of entry, etc.
Firms also have to asses whether they have the capacity or ability to fill the gaps in the market, and whether going into such gaps correspond to the business’ image
