Market segmentation

Market segmentation is a strategy that involves dividing a larger market into subsets of consumers who have common needs and applications for the goods and services offered in the market. These subgroups of consumers can be identified by a number of different demographics, depending on the purposes behind identifying the groups. Marketing campaigns are often designed and implemented based on this type of customer segmentation.

The key task is to find the variable, or variables that split the market into actionable segments

There are two types of segmentation variables:

(1) Needs

(2) Profilers

The basic criteria for segmenting a market are customer needs. To find the needs of customers in a market, it is necessary to undertake market research.

Profilers are the descriptive, measurable customer characteristics (such as location, age, nationality, gender, income) that can be used to inform a segmentation exercise.

The most common profilers used in customer segmentation include the following:

Profiler Examples

Geographic

• Region of the country
• Urban or rural

Demographic

• Age, sex, family size
• Income, occupation, education
• Religion, race, nationality

Psychographic

• Social class
• Lifestyle type
• Personality type

Behavioural

• Product usage - e.g. light, medium ,heavy users
• Brand loyalty: none, medium, high
• Type of user (e.g. with meals, special occasions)

Effective market segmentation

• Improves understanding of the customer base
• Provides a clear classification of the customers
• Enables the generation of a targeted product portfolio that responds to the needs of the market place
• Helps gauge a company's market position relative to the competition
• Leads to the effective fine tuning of marketing strategies

Marketing strategy

A marketing strategy defines objectives and describes the way you're going to satisfy customers in your chosen markets.
Marketing strategies serve as the fundamental underpinning of marketing plans designed to fill market needs and reach marketing objectives.
Marketing strategy involves careful scanning of the internal and external environments which are summarized in a SWOT analysis. Internal environmental factors include the marketing mix, plus performance analysis and strategic constraints . External environmental factors include customer analysis, competitor analysis, target market analysis, as well as evaluation of any elements of the technological, economic, cultural or political/legal environment likely to impact success . A key component of marketing strategy is often to keep marketing in line with a company's overarching mission statement.

SWOT Analysis

SWOT is an acronym used to describe the particular Strengths, Weaknesses, Opportunities, and Threats that are strategic factors for a specific company. A SWOT analysis should not only result in the identification of a corporation’s core competencies, but also in the identification of opportunities that the firm is not currently able to take advantage of due to a lack of appropriate resources.

External factors - Macro enviorment

--PESTEL 

• Political factors. These refer to government policy such as the degree of intervention in the economy. What goods and services does a government want to provide? To what extent does it believe in subsidising firms? What are its priorities in terms of business support? Political decisions can impact on many vital areas for business such as the education of the workforce, the health of the nation and the quality of the infrastructure of the economy such as the road and rail system.
• Economic factors. These include interest rates, taxation changes, economic growth, inflation and exchange rates. As you will see throughout the "Foundations of Economics" book economic change can have a major impact on a firm's behaviour.
• Social factors. Changes in social trends can impact on the demand for a firm's products and the availability and willingness of individuals to work. In the UK, for example, the population has been ageing.
• Technological factors: new technologies create new products and new processes. Technology can reduce costs, improve quality and lead to innovation. These developments can benefit consumers as well as the organisations providing the products.
• Environmental factors: environmental factors include the weather and climate change. Changes in temperature can impact on many industries including farming, tourism and insurance.
• Legal factors: these are related to the legal environment in which firms operate.

--Competitors annalysis

Inorder to do a competitor analysis a company can construct a porters five force model.

External factors - Micro enviorment

Out here 3 main key ellements are discussed:

• Consumers
• Suppliers
• Stakeholders

Internal Factors

Under this following key eelements are discussed:

• Men
• Money
• Machinery
• Minutes

However mentioned macro, micro elements can be clarrified by the following diagram

Marketing communication

Marketing communications is a subset of the overall subject area 'marketing'. 
Your marketing plan will be executed by using the tactical elements of the Marketing Communications, or Promotions Mix.

The above are the elements of marketing communication mix. The Marketing Communications Mix is the specific mix that a company uses to pursue its advertising and marketing objectives.

Advertising - Any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor.It reaches large, geographically dispersed audiences, often with high frequency; Low cost per exposure, though overall costs are high; Consumers perceive advertised goods as more legitimate; Dramatizes company/brand; Builds brand image; may stimulate short-term sales; Impersonal, one-way communication; Expensive.

Personal selling - Personal presentation by the firm’s sales force for the purpose of making sales and building customer relationships. It is most effective tool for building buyers’ preferences, convictions, and actions; Personal interaction allows for feedback and adjustments; Relationship-oriented; Buyers are more attentive; Sales force represents a long-term commitment; Most expensive of the promotional tools. 

Sales promotion - Short-term incentives to encourage the purchase or sale of a product or service.  It may be targeted at the trade or ultimate consumer; Makes use of a variety of formats: premiums, coupons, contests, etc.; Attracts attention, offers strong purchase incentives, dramatizes offers, boosts sagging sales; Stimulates quick response; Short-lived; Not effective at building long-term brand preferences. 

Public relations - Building good relationships with the company’s various publics by obtaining favorable publicity, building up a good "corporate image", and handling or heading off unfavorable rumors, stories, and events. It is highly credible; Very believable; Many forms: news stories, news features, events and sponsorships, etc.; Reaches many prospects missed via other forms of promotion; Dramatizes company or product; Often the most under used element in the promotional mix; Relatively inexpensive (certainly not 'free' as many people think--there are costs involved). 

Direct marketing - Direct communications with carefully targeted individual consumers to obtain an immediate response and cultivate lasting customer relationships. It has many forms: Telephone marketing, direct mail, online marketing, etc.; Four distinctive characteristics: Nonpublic, Immediate, Customized, Interactive; Well-suited to highly-targeted marketing efforts

However, when deciding upon your unique marketing communications mix, you should also consider the Product Life Cycle. Here are some general guideline as to how and when to emphasize different parts of the mix according to the stages of a typical product life cycle:

Pre-Introduction: Light advertising, pre-introduction publicity.
Introduction: Heavy use of advertising, public relations for awareness, sales promotion for trial.
Growth: Advertising, public relations, branding and brand marketing, personal selling for distribution. 
Maturity: Advertising decreases, sales promotion, personal selling, reminder & persuasion.
Decline: Advertising and public relations decrease, limited sales promotion, personal selling for distribution

7P's of Marketing / Marketing mix

The marketing mix is the combination of marketing activities that an organisation engages in so as to best meet the needs of its targeted market. Traditionally the marketing mix consisted of just 4 Ps but 'Booms and Bitner's ' espanded the marketing mix by adding 3 more P's in it, however the additional P's have been added because today marketing is far more customer oriented than ever before, and because the service sector of the economy has come to dominate economic activity in this country. 

It is essential to balance the 4Ps or the 7Ps of the marketing mix. The concept of 4Ps has been long used for the product industry while the latter has emerged as a successful proposition for the services industry.

The 7Ps of the marketing mix can be discussed as:

Product - It must provide value to a customer but does not have to be tangible at the same time. Basically, it involves introducing new products or improvising the existing products.

Price - Pricing must be competitive and must entail profit. The pricing strategy can comprise discounts, offers and the like.

Place - It refers to the place where the customers can buy the product and how the product reaches out to that place. This is done through different channels, like Internet, wholesalers and retailers.

Promotion - It includes the various ways of communicating to the customers of what the company has to offer. It is about communicating about the benefits of using a particular product or service rather than just talking about its features.

People - People refer to the customers, employees, management and everybody else involved in it. It is essential for everyone to realize that the reputation of the brand that you are involved with is in the people's hands.

Process - It refers to the methods and process of providing a service and is hence essential to have a thorough knowledge on whether the services are helpful to the customers, if they are provided in time, if the customers are informed in hand about the services and many such things.

Physical (evidence) - It refers to the experience of using a product or service. When a service goes out to the customer, it is essential that you help him see what he is buying or not. For example- brochures, pamphlets etc serve this purpose.

Introduction to marketing

Marketing is perceived as a mean of simply promotion and advertising. However, the term ‘marketing’ actually covers everything from company culture and positioning, through market research, new business/product development, advertising and promotion, PR (public/press relations), and arguably all of the sales functions as well.

There are many definitions of marketing. The better definitions are focused upon customer orientation and satisfaction of customer needs.

Marketing is the social process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others.

Kotler.

Marketing is the management process that identifies, anticipates and satisfies customer requirements profitably.

The Chartered Institute of Marketing (CIM).

The CIM definition (in common with Barwell's definition of the marketing concept) looks not only at identifying customer needs, but also satisfying them (short-term) and anticipating them in the future (long-term retention).

The right product, in the right place, at the right time, at the right price

Adcock.

The Marketing Concept 

The marketing concept rests on the importance of customers to a firm and states that:

• All company policies and activities should be aimed at satisfying customer needs, and
• Profitable sales volume is a better company goal than maximum sales volume.

To use the marketing concept, businesses should:

• Determine the needs of their customers (Market Research);
• Analyze their competitive advantages (Market Strategy);
• Select specific markets to serve (Target Marketing), and;
• Determine how to satisfy those needs (Market Mix).

Principle of marketing 

Marketing is used to identify the customer, satisfy the customer, and keep the customer. With the customer as the focus of its activities, it can be concluded that marketing management is one of the major components of business management. Marketing evolved to meet the stasis in developing new markets caused by mature market  and over-capacities in the last 2-3 centuries.The adoption of marketing strategies requires businesses to shift their focus from production to the perceived needs and wants of their customers as the means of staying profitable.

The term marketing concept holds that achieving organizational goals depends on knowing the needs and wants of target market and delivering the desired satisfactions.It proposes that in order to satisfy its organizational objectives, an organization should anticipate the needs and wants of consumers and satisfy these more effectively than competitors.