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PAGE PAGE 121 Chapter 9 – Identifying Market Segments and Selecting Target Markets Chapter Overview/Objectives/Outline Overview Sellers can take three approaches to a market. Mass marketing is the decision to mass-produce and mass distribute one product and attempt to attract all kinds of buyers. Product-variety marketing attempts to offer a variety of products to broaden the customer base. Target marketing is the decision to distinguish the different groups that make up a market to develop corresponding products and marketing mixes for each target market. Sellers today are moving away from mass marketing and product differentiation and are moving toward target marketing because the latter is more helpful in spotting market opportunities and developing winning product marketing mixes. The key steps in target marketing are market segmentation, market targeting, and product positioning. Market segmentation is the act of dividing a market into distinct groups of buyers with different needs or responses. The marketer tries different variables to see which reveal the best segmentation opportunities. For each segment, a customer segment profile is developed. Segmentation effectiveness depends upon arriving at segments that are measurable, substantial, accessible, and actionable. The primary steps in target marketing are to identify and profile distinct groups of buyers that may require different products or marketing mixes, selecting one or more market segments to enter, and establish and communicate the key distinctive benefits of the product or service to the target market (positioning). The seller should target the best market segment(s). The seller must evaluate the potential of each segment, which is a function of segment size and growth, segment attractiveness, and company objectives and resources. Then, the seller should determine how and when it can ignore segment differences (undifferentiated marketing), develop different market of
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