Marketing

Marketing Term Paper

Sean Gamble

When deciding to write this term paper, I had a lot of topics to choose from that were both interesting and exciting. In the end, I decided to right this term paper on identifying market segments and targets. I found this subject in the course by far the most interesting of any topic covered. In the research that I conducted, I noticed many similarities in all the texts that I read. In this paper I am going to explain what a market segment is, and then I am going to explain on how to target a certain segment for a particular product.

When looking at a market segment, we need to identify what one is, Joe Marconi in his book Creating the Marketing experience defines market segments as “Aggregating perspective buyers into groups that have common needs and will respond similarly to a certain marketing action.” He further explains that market segments are relative homogenous collection of potential buyers. This was the best definition that I found for this term. Once you have identified what the market segment is, you now need to follow steps to get it into practice.

There are five basic steps as outlined in his book. Step one consists of grouping possible consumers into segments that should have similar characteristics to each other and respond similar to marketing actions like a new product or price. This is the basic step in getting to know your potential target audience. As George Moschis write in his book Marketing Strategies for a Mature Market, “marketing segmentation at this point stresses two things, grouping people or organizations according to similarities of needs and benefits desired, and needs and benefits must be related to specific tangible

marketing actions.” Without following this step could result in a complete failure of the whole marketing plan.

The second step consists of putting products that have similar characteristics into groups. This step allows the marketer to have a better understanding of what is offered

and to see the potential competition that is on the current market. Even though the process of grouping can be expensive, it can also satisfy customer needs. The only way it can do this is if it meats a customer need, if it does not effect the quality of the offered product, it must not increase the sales price, and it must add to the revenue of the company. Basically the marketing manager is trying to see what he/she has that the consumer may want.

The third step is to gain information from current sources to better understand the size of the marketing area and to see if there is enough demand for your current product. This step requires the gathering of information on area demographics and the products that are currently on the market. By observing similar products and their consumers, a good manager will be able to identify what is working and what needs to be improved on for the launch of their product. This step does not only project the current market, it also estimates the future size. In this stage, the manager needs to ensure that the target audience is accessible to their marketing strategy. It would do no good to develop a plan only to find that half of your target segment does not have the medium to receive your advertising. Also at this step the manager needs to research and find out if the accessibility is going to be profitable or not worth the effort.

Step four is the selection of the target segment. The marketing department at this step should identify what their target consumer is going to be. All the other steps and the market research come to a point now that is going to define the marketing strategy. At this stage, the marketing team will break down their segments into other segments. They may decide to break the segment into regions based on shared characteristics, age of household or size. Lifestyle that the target consumer may have, benefits sought from the consumer, and the frequency of buying. The segment can then be broke down even further to identify the target consumer by age, gender, income level and so on. Once the target segment has been selected, the team can move onto step five.

Step five is actually taking the action to form a marketing plan to reach that segment. This is a very critical step in the plan. The marketing team needs to select the right mix to reach their possible consumer. The marketing plan should consist of marketing strategies that involve the use of identifiers for their particular audience. At this step the marketing team is going to identify the way to go about reaching their consumers. By researching similar products the team may identify certain areas that are working and some that are not. The use of marketing media needs to be identified in this