It deals with the detailed analysis of target markets to study the demographic, psychographic, and geographic variables of the end users of your product. Target market segmentation is important in every industrial segment as it outlines business plans; thereby, enabling business organizations to reach their intended customer segments. Market Segmentation Steps for Business Success Market segmentation is the process of detecting sub-segments within a market to identify the right target market for different brands. Also, market segmentation enables companies to develop and implement relevant strategies to promote offerings in the target market segments.
Factors such as market penetration, market share, profit margins, budgets, financial analysis, capital investment, government actions, demographic changes, emerging technology and cultural trends are also addressed. There are two major components to your marketing strategy: However, in concert with defining the marketing strategy you must also have a well defined methodology for the day to day process of implementing it.
It is of little value to have a strategy if you lack either the resources or the expertise to implement it. In the process of creating a marketing strategy you must consider many factors.
Of those many factors, some are more important than others. However, many are common to all marketing strategies. Some of the more critical are described below. You begin the creation of your strategy by deciding what the overall objective of your enterprise should be.
In general this falls into one of four categories: If the market is very attractive and your enterprise is one of the strongest in the industry you will want to invest your best resources in support of your offering.
If the market is very attractive but your enterprise is one of the weaker ones in the industry you must concentrate on strengthening the enterprise, using your offering as a stepping stone toward this objective.
If the market is not especially attractive, but your enterprise is one of the strongest in the industry then an effective marketing and sales effort for your offering will be good for generating near term profits.
If the market is not especially attractive and your enterprise is one of the weaker ones in the industry you should promote this offering only if it supports a more profitable part of your business for instance, if this segment completes a product line range or if it absorbs some of the overhead costs of a more profitable segment.
Otherwise, you should determine the most cost effective way to divest your enterprise of this offering.
Having selected the direction most beneficial for the overall interests of the enterprise, the next step is to choose a strategy for the offering that will be most effective in the market. These low costs should translate to profit margins that are higher than the industry average.
Some of the conditions that should exist to support a cost leadership strategy include an on-going availability of operating capital, good process engineering skills, close management of labor, products designed for ease of manufacturing and low cost distribution. The emphasis can be on brand image, proprietary technology, special features, superior service, a strong distributor network or other aspects that might be specific to your industry.
This uniqueness should also translate to profit margins that are higher than the industry average. In addition, some of the conditions that should exist to support a differentiation strategy include strong marketing abilities, effective product engineering, creative personnel, the ability to perform basic research and a good reputation.
It is based on the concept of serving a particular target in such an exceptional manner, that others cannot compete.
Usually this means addressing a substantially smaller market segment than others in the industry, but because of minimal competition, profit margins can be very high.
Pricing Having defined the overall offering objective and selecting the generic strategy you must then decide on a variety of closely related operational strategies.A market-coverage strategy in which a firm decides to target several market segments and designs separate offers for each.
concentrated marketing A market-coverage strategy in which a firm goes after a large share of one or a few submarkets. Marketing Research. Managers need information in order to introduce products and services that create value in the mind of the customer.
But the perception of value is a subjective one, and what customers value this year may be quite different from what they value next year.
Keith's Sporting Goods sports equipment retail business plan market analysis summary. Keith's Sporting Goods is a start-up retailer of athletic sporting goods and equipment. Market Segmentation; Target Market Segment Strategy; Competition and Buying Patterns; Related business plans.
Clothing E-commerce Site Business Plan;/5(24). A Significant Marketing Strategy in Business Management Planning. Target marketing will help focus your efforts: for example, will a guerilla marketing definition fit your business or are there more effective strategies and tactics to use. Conduct market segment research to direct your business management planning strategies on your targeted market.
Defining your target market is key to your business plan and your new business. Learn how to write the Market Analysis section of the business plan. (From Pricing Strategy Through Sales Plan) How to Write the Market Analysis Section of a Business Plan. Use Target Marketing & Market Segmentation to Improve Your Bottom Line.
Define Your. Today, Segmentation, Targeting and Positioning (STP) is a familiar strategic approach in Modern Marketing. It is one of the most commonly applied marketing models in practice. Product differentiation and market segmentation as alternative marketing strategies.
Amazon’s business strategy, revenue model and culture of metrics: a history.