Page 19 - Marketing the Basics 2nd

What is ManageMent? 11
taking a population and dividing it into groups according to a set of shared characteristics. In order to create these groups, market research is needed to identify the characteristics that the segment shares. Market research is the planned, systematic collection and analysis of data used by managers to make a decision. Market research provides information on a customer’s preferences, their buying habits, their attitudes, likes and needs. Furthermore, market research reveals the potential size and purchasing power of the segment.
An example of segmentation is what drug firm, Pfizer, is now doing. In the past they used sales reps to call regularly on physicians to inform them about new types of therapies. However, Pfizer no longer treats all physicians alike; research revealed that many physicians did not appreciate sales reps taking up their already limited time. Physicians much prefer to evaluate information while attending seminars or during their spare time reading information published on the Internet. As such, Pfizer responded by segmenting physicians according to their communication preferences. By doing so, Pfizer could better allocate its resources to the needs of each group.
Segmenting the market allows the marketer to identify which group or groups are the most attractive. For any market there are many potential segments: one of the great challenges of marketing is carefully choosing a small number of segments on which to focus your limited resources. Learning to say no to opportunities is a difficult thing for many marketers to do! Even a giant like IBM has only finite resources and must carefully align them to the markets for which it has best advantages over their competitors. The segment(s) the firm decides to market their product is called the target market. It is the target market that is exposed to a variety of carefully calibrated marketing strategies, what we call the five Ps (product, place, price, promotion and people). Together, the strategies chosen for the 5 Ps is known as the marketing mix.
We discuss market segmentation and the marketing mix in further detail in later chapters.
Marketing myopia, a term coined by Harvard’s Ted Levitt, arises when marketers lose sight of what is driving the consumer’s purchasing decision: satisfying customer needs. Marketing myopia