Page 58 - Marketing the Basics 2nd

50 Marketing: the Basics
FINAL THOUGHTS ON SEGMENTATION
Marketers rarely use one segmentation method. Each methodology we have discussed has certain advantages and disadvantages. By using a combination of approaches, the marketer gains insight on the different dimensions of their customers. Oversegmentation can occur when a marketer unnecessarily segments the market. Just because consumers express the desire to have products more closely tailored to fit their needs, that doesn’t mean they won’t purchase the product altogether, the key principle to keep in mind as they only adjust the levers of the marketing-mix upward if it will result in more revenue than the cost incurred.
TARGETING THE MARKET
Choosing your target market is the process of evaluating each segment’s attractiveness and choosing which one or ones to go after. Which markets to enter depends on the corporate strategy and the company’s resources. One of the hardest things to do for many marketers is to choose their target segments and stick with them. Learning to say ‘no’ to other segments is very hard but because every firm has limited resources.
Welch’s introduced a pomegranate flavour to their popular juice line. Initially, this new product was targeted at the same children’s market as their successful grape juice lines. However, this blend never caught on with these consumers. Aware of clinical research studies revealing the health benefits of pomegranates, the target market was altered to health conscious women aged 25-54. This shift in focus transformed a four-year decline in sales into to a 12 per cent increase.
EVALUATING MARKET SEGMENTS
When evaluating to which segments to offer a product, a firm considers three factors: the size and growth opportunities, the existing industrial structure and the company’s objectives and capabilities. The company collects and analyses data on each segment, calculating the current sales, projected growth rates and expected profit levels. Those that meet the company’s size and