______________ is the process of naming broad product-markets and then segmenting these broad product-markets in order to select target markets and develop suitable marketing mixes.
What are your choices?
Market segmentation
Diversification
The process you are referring to is known as market segmentation. To carry out market segmentation effectively, the following steps can be followed:
1. Naming broad product-markets: This involves identifying and categorizing the different types of products or services available in the market. For example, in the automotive industry, broad product-markets could include sedans, SUVs, trucks, and electric vehicles.
2. Segmenting the broad product-markets: Once the product-market categories are established, the next step is to segment these broad markets. This entails dividing them into smaller, distinct groups based on specific characteristics such as demographics (age, gender, income), psychographics (lifestyle, values), behavior patterns, or geographic location.
3. Selecting target markets: After segmentation, the marketer needs to evaluate the different segments and select one or more target markets to focus on. This decision is influenced by various factors such as the attractiveness of each segment, the company's resources and capabilities, and the competition within each segment.
4. Developing suitable marketing mixes: Once the target markets are selected, the marketer can develop a tailored marketing mix for each segment. This includes determining the product features, pricing strategies, promotional activities (advertising, sales promotions), and distribution channels that are most likely to appeal to the target market.
By practicing effective market segmentation, businesses can better understand and cater to the unique needs and preferences of specific customer segments, leading to more successful marketing strategies and increased customer satisfaction.