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Market segmentation
When the company has successfully identified the segments within a market, the next step is to target these segments with products that closely match the needs of the customers. There are three main targeting strategies:
? Concentrated
? Mass
? Differentiated
Concentrated (Niche or Focused) strategy is concerned with targeting one particular, well-defined, specific segment of customers within the market.
There are several different niche marketing strategies :
? End user strategy: serving only one type of end user customer.
? Vertical level strategy: specializing in one level of the production-distribution cycle.
? Customer size strategy: selling products designed for only one size customer, such as petite or extra large clothes.
? Service strategy: offering a service not available from any other company.
? Geographic strategy: selling only in one geographic area.
Advantages:
? Focused markets may be profitably by small companies that have relatively small overheads and, therefore, do not need to achieve the volume of sales required by larger competitors.
? The organization with focused marketing strategy could be seen as specialist that is able to offer the high quality products.
? Niche companies offer products for customers who look for original item that could stress individual traits of the buyer.
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