B Com Hons Final Year Marketing notes Product Differentiation and Market segmentation



Differences Between Product Differentiation & Market Segmentation


Product differentiation and market segmentation are two distinct, important marketing strategy concepts. Product differentiation refers to the basic need to have product-related qualities that set your brand apart from the competition. Market segmentation is the breakdown of a large target audience into smaller, more homogenous groups of customers.

Differentiation Basics

As the root word "different" suggests, differentiating your product means making it distinct from other products that are competing for the same customers. While it is important to have a product that is of good quality and offers excellent benefits, you also need something that allows consumers to recognize it as unique. If 10 companies all offer "good" products that are very similar and are marketed similarly, it is difficult for customers to make a choice. This leaves your potential for purchase largely up to random chance. Differentiation is a key element of positioning, which is creating a unique image of your brand in the mind of your target audience.

Approaches

Generally, you differentiate your product or brand by making it of better quality than competing products. In highly competitive marketplaces, you have to get more creative to develop and communicate better value. Unique features, customized designs, and use of green-friendly or organic materials may separate your product from the crowd. You can also offer money-back guarantees, warranties, service, support, and opportunities for upgrades over time.

Segmentation Basics

Market segmentation is intended to help you optimize efficiency with your advertising investments. It is derived from the basic adage "you can't be all things to all people." Companies may target one distinct target market, or go after several different ones. Market segmentation allows you to target markets that either have different needs, want different benefits, or require different messages delivered through different media. In essence, segmentation overcomes the inability to impact all possible customers with one advertising campaign or message.

A business can use market segmentation to its advantage by knowing the basis to segment customers, such as targeting potential customers with the greatest profit potential. The potential customers that fit this demographic for a business become a market segment. A business can have more than one market segment for a product, and each market segment is part of the overall marketing strategy. These targeted segments can lead to significantly improved marketing effectiveness.

Approaches

The most traditional segmentation strategy is demographics. This is identifying particular customers based on shared traits, such as age, race, gender, marital status, income, education or occupation. This approach allows you to design messages for a prototypical customer and figure out what he watches or reads. Lifestyle segmentation is another approach, where you target people with shared hobbies and interests. Geographic segmentation is used by companies with broad audiences located in particular local, state, regional, national or international markets. Behavioral segmentation emphasizes customers with similar usage rates or benefits requirements.

Comments

Post a Comment

Popular posts from this blog

Work certified and uncertified

Meaning of Work Certified  When contractor takes the contract to complete any construction work, it may complete in 4 or 5 years. but contractor has to pay different expenses for material, labor and others. So, it is very necessary to pay him some money of contract. This money is given on the basis of work done. So, any part of construction which is completed by contractor will be work certified if it is certified by an authority. Authority may be independent engineer or architect who can estimated the work. He will issue the certificate of work done after certifying the work of construction. On this work certified, contractor has right to get money of contract. Meaning of Work Uncertified Work uncertified means work done but not certified by authority. So, contractee will cut some money on the basis of work uncertified and will keep in his pocket. This will be retention money. Accounting Treatment of Work Certified and Work Uncertified  (I) Work  certified and work unce
Read more

factors influencing choice of advertising agency

The Advertiser looks for an advertising agency whose services and expertise meets his requirements. Following factors should be considered while selecting an advertising agency:- Services offered by Ad-agency  - There are different agencies provides different services, some provides all the services, some provide selected services, some provides only media services. It depends on the requirement of advertiser whether he need a fulls service agency, creative boutique, media buying service agency, or a  sweet shop . Experience of Agency  - An experienced agency performs better then a new agency  because it is familiar with different components of marketing environment like- competitors' policies, taste of consumer, income of consumer, consumer responses, fashions and trends, reputation of different media etc. Location  - A major factor to be considered while selecting ad-agency is location of office of agency. A considerable amount of communication is required at diffe
Read more

Sale of Goods Act- Conditions and Warranties

Image
The Sale of Goods Act, identifies the terms, ‘Conditions’ and ‘Warranties’ as being of a prime significance in a contract of sale. Both the terms imply a promise that is made by the seller. However, the difference between Conditions and Warranties arises due to the nature of the promise that is made in each case. In the case of ‘Condition’ the impact is on the very essence of the contract; whereas, in the case of ‘Warranty’, the promise is in the nature of a collateral to the main purpose of the contract. It is thus evident that if there is a breach of either, a condition or a warranty, the effects will be different. Illustration 1:   Sita bought a wet grinder from an electric shop. The purpose for which the grinder was to be used was known to the seller. The grinder was unfit for the purpose. In this case there is a breach of an express condition by the electric shop and Sita is entitled to return the grinder and be refunded the money paid. Illustration 2:   Varuna bought a
Read more