LEVELS OF MARKET SEGMENTATION

Mass Marketing

 The seller engages in mass production, mass distribution, and mass promotion of one product to all buyers.  Mass marketing creates the largest potential market, which leads to the lowest costs, which in turn can lead to lower prices or higher margins. Now a day the explosion of advertising media and distribution channels has made it difficult and increasingly expensive to reach a mass audience.

Micromarketing

 Many companies are turning to micromarketing these days by choosing one of the four levels;  segments, niches, local areas, and individuals.

SEGMENT MARKETING

A market segment consists of a group of customers who share a similar set of wants.  A segment further contains a sector. E.g. A Car Company might say that it will target young, middle-income car buyers. But the young, middle-income car buyers will differ about their wants in a car; low cost or expensive car. So, the young, middle-income car buyer is a sector.

Segment marketing offers several benefits over mass marketing, some of them are:

1. The company can create a more fine-tuned product or service offering and price it appropriately for the target segment.

2. The company can more easily select the best distribution and communications channels.

3. The company can also have a clearer picture of its competitors.

   

NICHE MARKETING

 A niche is amore narrowly defined group seeking a distinctive mix of benefits. Marketers usually identify niches by dividing a segment into sub segments.

An attractive niche has the following characteristics:

1. The customers in the niche have a distinct set of needs.

2. They will even pay a premium to the firm that best satisfies their needs.

3. The niche is not likely to attract other competitors.

4. The nicher gains certain economies through specialization.

5. The niche has size, profit and growth potential.

  

LOCAL MARKETING

Target marketing is leading to marketing programs tailored to the needs and wants of local customer groups (trading areas, neighborhoods, even individual stores)

 INDIVIDUAL CUSTOMER MARKETING

The ultimate level of segmentation leads to “segments of one,” “customized marketing,” or “one-to-one marketing”. Ultimately every individual has a unique set of wants and preferences. In past centuries, producers customized their offerings to each customer: the tailor fitted a suit and a cobbler made shoes for each individual.

Mass-customization

It is the ability of a company to prepare on a mass basis individually designed products, services, programs, and communications, to meet each customer’s requirements.

Customerization

 It combines operationally driven mass customization with customized marketing in a way that empowers consumers to design the product or service offering of their choice. The firm no longer requires prior information about the customer, nor does the firm need to own manufacturing. The firm provides a platform and tools and rents out to customers the means to design their own products. Each business unit will have to decide whether it would gain more by designing its business system to create offerings for segments or for individuals. Companies that favor segmentation see it as more efficient, requiring less customer information, and permitting more standardization of market offerings. Those who favor individual marketing claim that segments are a fiction, that individuals within so-called segments differ greatly and that marketer can achieve much more precision and effectiveness by addressing individual needs.