How do companies identify attractive market segments? How do they choose a target marketing strategy?
What will be an ideal response?
To target the best market segments, the company first evaluates each segment's size and growth characteristics, structural attractiveness, and compatibility with company objectives and resources. It then chooses one of four marketing strategies: undifferentiated, differentiated, concentrated, and micromarketing. The seller can ignore segment differences and target broadly using undifferentiated marketing. This involves mass-producing, mass-distributing, and mass-promoting nearly the same product in about the same way to all consumers. Or the seller can adopt differentiated marketing by developing different market offers for several segments. Concentrated marketing involves focusing on only one or a few market segments. Finally, micromarketing is the practice of tailoring products and marketing programs to suit the tastes of specific individuals and locations.
The targeting strategy depends on the company resources, product variability, product life-cycle stage, market variability, and competitive marketing strategies.
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