Reference no: EM132833218

What You Need to Know Targeting and Segmenting Markets

Within a market, a market segment is a subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs. Reading the following resources will explore this in more detail:

• Chapter 8 in the MKTG 12 text
• Tow, H. (n.d.). The 4 main types of market segmentation (+how to implement it in your marketing strategy). https://learn.g2.com/market-segmentation

Product Life Cycle

Products have a life span, just people. The product life cycle (PLC) is a biological metaphor that traces the stages of a product's acceptance, from its introduction (birth) to its decline (death). A product progresses through four major stages: introduction, growth, maturity, and decline.

• Read Chapter 11, pages 210-213, and pages 286-287, "Stages in the Product Life Cycle," in the MKTG 12 text.

Laws of Marketing

Continue to read and learn more about the various laws of marketing. How do you see these laws used in your favorite companies?

• Read Chapters 11-15 in Ries and Trout, The 22 Immutable Laws of Marketing.

Market Segmentation

Market segmentation refers to the division of markets into logical pieces. Markets can be divided into consumer markets and organizational or business-to-business markets, in which products are often bought either for use in making other products or for institutional use. Consumer markets are often divided using a variety of variables, including demographic variables, psychographic variables, geographic variables, and behaviorist variables, as ways to break up the total consumer pie. With identification of each market segment, clear marketing strategy decisions can be made.

Market segmentation can be considered like pieces of a pie that form an overall target market. Look at market segmentation with one of the most popular products in the world-Coca-Cola. Use the following segmentation variables in your analysis:

• Demographic: All genders, all income levels.
• Psychographic: sweet, caffeinated beverage seekers, not health conscious.
• Geographic: Mass distributed worldwide, multiple locations.
• Behavioral: Very brand conscious, only drink Coke.

How would you fall into these segments?

Product Life Cycle

A product has four major stages: introduction, growth, maturity, and decline.

The tasks of a marketer differ in each of the phases of a product or service life cycle.

• In the introductory stage of the life cycle, sales and profits are zero. Marketing's challenge is to bring the product to market, arranging for distribution, initial promotion, consumer awareness, and positioning.
• The growth state of the cycle is often marked by rapid increase of sales and profits, the appearance of competition, and pressure to lower prices and add new product features.
• Maturity sees the leveling of demand for a product, declines in profits and pricing, lowered promotional costs, expansion into less profitable markets, and the exit of some competitors from the market.
• During a product's decline phase, sales fall rapidly, and the product may be put on a fast track to being discontinued or relegated to a small niche within a company's offerings. Promotional spending is generally very low on a product in this stage, and clearance pricing is often evident.

These are general trends for each life cycle stage. In each specific case of a product, service, or even a brand, the conditions may vary, as will the length of the cycle. It may be as short as a few months (fads) to well over 100 years (Coke, Pepsi, Levi's jeans). New products with better materials, better technology, or different fashions may force a product into early "retirement."

When a product is successfully introduced into a market (or sometimes creates a market), it generates a rapid increase in sales, ramping up in the introduction stage. As the market matures, sales decline and profits slow or dwindle. The profit curve grows much more slowly than sales and begins the decline faster than sales.

As you have learned from your reading this week, market segments are helpful to break down target marketing into key areas. Having read the article The 4 Main Types of Market Segmentation (+How to Implement It in Your Marketing Strategy), pick a company whose products you use or with whom you do business in some way. Analyze the company for each of the four types of market segments from the article. Identify the company and what the market segment is and then describe how it fits each of the four segments. Include examples with your posts.