3.4 Implementing segmentation strategies

Market strategy includes three important phases; Market segmentation, the target and positioning.

1.	Market segmentation: Market segmenting is dividing the market into groups of individual markets with

similar wants or needs that a company divides into distinct groups which have distinct needs, wants,

behavior or which might want different products & services.

2.	The target refers to the selection of one or more segments. Based on the characteristics of this target,

the marketing mix is decided. The marketing mix is the unique configuration of the four basic marketing

variables (product, price, promotion, price, and channels of distribution) that a marketing organization

controls.

3.	Positioning is the third step. The term positioning is defined as establishing a specific image for a brand

in relation to competing brands. This step is reflecting how the product is perceived by the consumer in

each target segment satisfying his or needs better than other competitive offerings.

Firms that use market segmentation are applying either a concentrated marketing strategy or a differentiated marketing strategy. In some instances they use a counter segmentation strategy.

3.4 Implementing segmentation strategies

Concentrated strategy: It is a strategy that targets one segment only that receives a special designed marketing mix. This strategy is used for small or new companies.

Differentiated strategy: It is a strategy that targets several segments using individual marketing mixes. This strategy is highly appropriate segmentation strategy for financially strong companies that are well established in a product category and competitive with other firms that are strong in the category. This applies on companies such as soft drinks, automobiles or detergent.

Counter segmentation Strategy: Sometimes companies find that they should reconsider the extent to which they are segmenting their markets. Sometimes some segments have contracted over time to the point that they do need individually designed marking program. In this case the company needs to find more consumer characteristic that would apply to the members of two or more segments, and recombine them into a larger single segment that could be targeted with an individually tailored product.