Market Research & Segmentation Essentials

Posted on Nov 18, 2024 in Economy

Market Research

Market research involves gathering, recording, and analyzing data related to market goods and services. It draws from disciplines like psychology, anthropology, sociology, economics, statistics, and communication.

Market research informs decisions about:

  1. Introducing new products or services.
  2. Choosing distribution channels.
  3. Adjusting promotion and advertising strategies.

Market Segmentation

Market segmentation divides a market into smaller, uniform groups with similar characteristics and needs.

Segmentation Patterns

  • Homogeneous Preferences: Consumers share similar preferences.
  • Diffuse Preferences: Preferences vary widely among consumers.
  • Grouped Preferences: Distinct preference groups form natural market segments.

Segmentation Variables

  • Geographic: Region, country size, climate.
  • Demographic: Age, gender, family size, income, education.
  • Psychographic: Personality, lifestyle, values, attitudes.
  • Behavioral: Benefit sought, usage rate, brand loyalty.

Segmentation Benefits

  • Identify specific needs.
  • Target marketing strategies effectively.
  • Optimize resource use (marketing, production, logistics).
  • Enhance advertising effectiveness.
  • Identify niche markets.
  • Increase growth potential.

Segmentation Strategies

  1. Single Segment & Product: Focus on one segment with one product.
  2. Selective Strategy: Serve specific segments with tailored products.
  3. Product Specialization: Offer one product to multiple segments.
  4. Market Specialization: Serve one segment with various products.
  5. Full Coverage: Offer all products to all segments.

Market Concepts

  • Market Potential: Future market with unmet needs.
  • Market Opportunities: Identified segments with undefined offerings.
  • Real Market: Segment with defined needs and product offerings.

Successful market entry requires:

  1. Visibility: Product awareness in the market.
  2. Availability: Product accessibility to customers.
  3. Usability: Conditions for product use.
  4. Benefit Expectations: Perceived product advantages.
  5. Economic Capacity: Customer purchasing power.

Segmentation Process

  1. Identify Segmentation: Define the market to analyze.
  2. Choose Patterns & Variables: Select relevant segmentation criteria.
  3. Sort & Analyze Information: Organize and interpret data.
  4. Segment: Divide the market based on chosen variables.
  5. Select Segments: Choose target segments based on revenue potential.
  6. Initiate Marketing Process: Implement the marketing mix (4Ps).

Marketing Environment

  • Demographic: Population size and growth.
  • Economic: Income, spending patterns, and purchasing power.
  • Natural: Resource availability, environmental concerns.
  • Technological: Innovation and technological advancements.
  • Political-Legal: Laws and regulations affecting marketing.

Added Value Models

  • Image Value: Brand prestige and reputation.
  • Service Value: Quality and availability of services.
  • Personal Value: Customer interaction and experience.
  • Product Value: Product’s ability to meet needs.

Product Marketing

  • Benefit: Need fulfillment.
  • Package: Product presentation.
  • Brand: Product identity.

Product Life Cycle

  • Introductory: Innovators adopt the product.
  • Growth: Early majority adopts the product.
  • Maturity: Majority adopts the product.
  • Decline: Late majority adopts the product.

Product Types

  • Generic: Basic needs (e.g., water).
  • Convenience: Easily accessible products (e.g., rice).
  • Specialty: Specific needs requiring effort (e.g., insurance).
  • Unsought: Products not actively sought (e.g., graves).

Product Decisions

  1. Design and development.
  2. Branding.
  3. Packaging.
  4. Product mix.
  5. Product line.
  6. Product lifecycle.

Differentiation

Distinguishing a company’s offerings from competitors through product features, services, personnel, channels, and image.

New Product Development

  1. Idea generation.
  2. Idea filtering.
  3. Product definition.
  4. Business analysis.
  5. Marketing efforts alignment.
  6. Product development.
  7. Market testing.
  8. Marketing strategy implementation.
  9. Performance evaluation.

Product Mix

Organizing products into lines to meet specific needs.

Brand Equity

The added value a brand provides, reflected in consumer perceptions and behaviors.

Brand Equity Models

  1. VAM: Differentiation, relevance, esteem, knowledge.
  2. Haker: Loyalty, awareness, perceived quality, associations, assets.
  3. Branz: Presence, relevance, results, advantage, bonding.