An attractive market segment provides a good fit between a company’s capabilities and product range and customers’ needs. Companies with a good fit succeed by offering superior value to customers in the segment. … They should therefore focus their marketing resources on a single segment, according to Net MBA.
Why do we choose a selected segment of the market?
It helps determine the marketing mix.
Ideally, when you have identified a market segment, you’ll have insight into ways of shaping the combination of product, promotion, price, and place to fit that segment’s needs.
What makes a segment attractive?
They look at the potential profitability (is there an opportunity for a higher profit margin?) as well as the growth rate of the market segment. A segment becomes attractive when the product in question seems new to the customers and has plenty of room to expand.
How should a company choose attractive segments to target?
Here are some tips to help you define your target market.
- Look at your current customer base.
- Check out your competition.
- Analyze your product/service.
- Choose specific demographics to target.
- Consider the psychographics of your target.
- Evaluate your decision.
- Additional resources.
What are the benefits of segmentation in marketing?
Here are some of the most important advantages of market segmentation that you must know:
- Increases clarity. …
- Develops consumer insights. …
- Improves brand loyalty and customer engagement. …
- Streamlines mass customization. …
- Optimizes for cost efficiency and resource management. …
- Grows niche marketing capabilities.
Why should you segment your customers?
Segmentation allows businesses to make better use of their marketing budgets, gain a competitive edge over rival companies and, importantly, demonstrate a better knowledge of your customers’ needs and wants.
How do you use segmentation effectively?
Tips for Effective Segmentation
- Your Segments Should Be Distinctively Different. The size of your segments must be worth targeting them. …
- Remember the Goals of Segmentation. …
- Segmentation Isn’t Limited to the Marketing Department. …
- Use Data to Monitor Your Success.
What are three important characteristics of segments?
Common characteristics of a market segment include interests, lifestyle, age, gender, etc. Common examples of market segmentation include geographic, demographic, psychographic, and behavioral.
What criteria might you use to select target segments?
Following are 5 criteria that indicate whether you have selected a viable target market: size, expected growth, competitive position, cost to reach, and compatibility.
How do you evaluate and select the most appropriate market segment to target?
A good market segment should be:
- Identifiable (or differentiable). …
- Accessible. …
- Substantial: large enough to allow companies to make profits;
- Measurable: companies must be able to understand their market share and positioning as well as the segment size and purchasing power.