Marketing

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Introduction

The assignment revolves around the discussion of market segmentation, targeting and positioning approaches and the impact of these steps on the 4P’s of the new product i.e. product, price, place and promotion. These 4P’s are also referred to as the marketing mix of a particular product.

Market Segmentation Approaches

According to Wedel and Kamakura (2012), the market segmentation is a process which divides one market into one or many smaller segments, one or few of which are targeted by company to launch its new product.

The market segmentation helps the marketers design the overall marketing activities as they become aware of the specific attributes and position of the individuals or groups they are targeting.

In the view of Kotler (2012), the market is segmented on the basis of numerous approaches; some important approaches to segment the market for new product are discussed below briefly:

• Demographic Segmentation: The market segmentation based on age, gender, income, education, occupation and similar factors is referred to as the demographic segmentation. Almost every new product involves some type of demographic segmentation while identifying their desired market (Kotler, 2009).
• Geographic Segmentation: This type of market segmentation is based on geographical area. Products targeting specific cities, provinces or even countries are results of geographic segmentation (Wedel and Kamakura, 2012).
• Psychographic Segmentation: The psychographic segmentation is generally based on the lifestyle or psychological characteristics of an individual or group of individuals. This sort of segmentation is not employed for every product but it is commonly used when a business is launching a psychographic segmentation (Kotler and Armstrong, 2010).

The above three types of segmentation is commonly used by the marketers while launching a new product. There are other approaches to segment a market as well; those include benefits sought segmentation and usage rate segmentation but these are not as common as these three (Kotler, 2009).

Market Targeting Approaches

In accordance with Kotler and Armstrong (2010), the market targeting is an important marketing decision considering its contribution towards the success or failure of a new product. The market targeting is applied to select one or few desired segments for a particular product. There are many approaches to target the market for a product; some important of which are discussed below:

• Undifferentiated Strategy: When the marketers or a company decides to target individuals with different demographics or geography with a similar approach, it is known as the undifferentiated strategy. The undifferentiated strategy is generally used by marketers while marketing the necessities (Lotenberg Schechter and Strand, 2011).
• Differentiated Strategy: The targeting strategy is said to be differentiated when marketers differentiate in product or any other aspect towards different individuals or groups on the basis of any demographic, geographic or psychographic factor. This sort of strategy is employed while marketing the luxury or long-life products. The differentiated strategy is most commonly used targeting approach around the globe in this era (Kotler, 2012).
• Concentrated Strategy: The concentrated strategy is referred to as the targeting strategy when the marketer selects only one segment at a time and concentrates onto capitalise on that particular segment by designing marketing mix to meet the needs of that particular group (Hutt and Speh, 2005)

These targeting strategies are commonly used based on the nature of product and its broader market….