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Marketing Basics - Kotler Philip

Summary

Sellers can take three approaches to the market. Mass marketing is a decision on mass production and mass distribution of one product and an attempt to attract the attention of buyers of all types to it. Product-differentiated marketing - a decision to produce two or more products with different properties, in different design, different quality, in different packaging, etc. with the aim of offering the market a variety and differentiation of seller’s goods from competitors ’products. Target marketing is a decision on the delimitation of the various groups that make up the market, and the development of appropriate products and marketing complexes for each target market. Today, sellers are increasingly moving from the methods of mass and product-differentiated marketing to the methods of targeted marketing, which more helps to identify market opportunities and create more effective products and marketing complexes.

The main activities of targeted marketing are market segmentation, selection of target market segments and product positioning on the market. Market segmentation is a breakdown of the market into distinct groups of customers, each of which may require separate products and / or marketing complexes. To find the best, from the point of view of the company, segmentation opportunities, a market leader will try a variety of methods. In consumer marketing, the basis for segmentation is geographic, demographic, psychographic, and behavioral variables. Segmentation of markets for industrial goods can be done by variety of end users, by weight of customers, by their geographical location. The effectiveness of analytical segmentation work depends on the extent to which the resulting segments are measurable, affordable, solid and suitable for targeted actions.

Then the seller needs to select one or more of the most profitable market segments. But for this, you first have to decide exactly how many segments should be covered. The seller can neglect the differences in segments (undifferentiated marketing), develop different market offers for different segments (differential marketing) or focus his efforts on one or several segments (concentrated marketing). In this case, a lot depends on the resources of the company, the degree of homogeneity of products and the market, the stage of the product life cycle and the marketing strategies of competitors.

If a company decides to enter only one market segment, which segment should be chosen? Market segments can be evaluated both in terms of their inherent attractiveness, and in terms of the strong business aspects that a firm must possess in order to succeed in a particular segment.

The choice of a specific market determines both the circle of competitors-firms and the possibilities of its positioning. After examining the position of competitors, the company decides whether to take a place close to the position of one of the competitors, or try to fill the gap identified in the market. If a company takes a position next to one of its competitors, it must differentiate its offer due to the product, its price and qualitative differences. The decision on the exact positioning will allow the company to proceed to the next step, namely the detailed planning of the marketing mix.