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Marketing management Chapter 8

CHAPTER 8 IDENTIFYING MARKET SEGMENTS AND TARGETS. Markets are not homogeneous. A company cannot connect with all customers in large, broad, or diverse .markets.;Consumers vary on many dimensions and often can be grouped according to one or more characteristics. A company needs to identify which market segments it can serve effectively. | N THIS CHAPTER WÊ WILL ADDRESS THE FOLLOWING QUESTIONS 1. What are th e cliff e re nt ieve I s of market segmentation 2. How can a company divide a market into segments 3. How should a company choose the most attractive target markets 4. What are the requirements for effective segmentation CHAPTER 8 IDENTIFYING MARKET SEGMENTS AND TARGETS Markets are not homogeneous. A company cannot connect with ail customers in large broad or diverse markets. Consumers vary on many dimensions and often pen be grouped according to one or more characteristics. A company needs to identify which market segments ft can serve effectively. Such decisions require a keen understanding of consumer behavior and careful strategic thinking. Marketers sometimes mistakenly pursue the same market segment as many other firms and overlook some potentially more lucrative segments. he magnitude and wealth of older consumers for example should be important to many different marketers J The population of mature consumers those 50 and older will swell to 115 million in the next 25 years. Yet not only have youth-obsessed marketers traditionary neglected this huge market they have also turned them off with stereotypes of grandmas and grandpas living on fixed incomes.2 To young product managers everyone over 45 is lumped into a category called old says Lori Bitter partner at J. Walter Thompson s Mature Marketing Group. They went to put swing music in the background of an ad targeted at 50-year-old . We have to say No let s try Sting . Seniors particularly boomefs-tumed-seniors often make buying decisions based on lifestyle not age. But don t expect them to remain loyal once they ve made a decision. Although highly brand-conscious and brand-aware baby boomers are not necessarily as brand loyal as traditionally was the case A rapid gro. ng larget market Mature consumers v ho live active lives and iita nwke buying tossiars based not on age tat on lifestyle 239 240 PART 3 CONNËCTING WITH CUSTOMERS with alder