Focus Your MITE Vision: How to approach the Market??

Saturday, December 4, 2010

How to approach the Market??

Marketing planners need to develop a strategy for approaching the market. The marketer's first step is to access the needs of the market. Then, because consumers in a market are seldom uniform, planners must decide whether to treat the market as homogeneous (that is, as a single, undifferentiated, large unit) or as heterogeneous (a market composed of separate, smaller groups known as segments). The market segment of potential customers a product provider selects is its target market. Marketers approach their target markets with the competitive strategies of product differentiation and positioning. More elements are discussed below.

Undifferentiated and Segmentation Approaches: 
When planners treat the market as homogeneous, they purposely ignore differences in the market and use one marketing strategy that will appeal to as many people as possible. This market strategy known as an undifferentiated or market aggregation strategy. At one point in its history, many soft drink companies viewed the U.S market as homogeneous and used general appeals for all its consumers. This strategy is risky because it may appeal to no one, or the resources wasted will be greater than the total gain in sales.
Few examples of homogeneous markets exist. Often, companies take an undifferentiated approach because they lack the resources to target different market segments. For certain types of widely consumed items (such as gasoline and basic white bread), however, the undifferentiated market approach makes sense because the potential market is large enough to justify possible wasted resources. At one time, the bottled water industry used this approach, clearly, that has changed.
Market Segments:  is a much more common market approach. It assumes that the best way to sell to the market is to recognize differences and adjust to them accordingly. Marketers divide the entire heterogeneous market into segments that are homogeneous. From these segments, the marketers identifies, evaluates, and selects a target market, a group of people with similar needs and characteristics, who are most likely to be receptive to the marketer’s product. For instance, a retailer such as computer shop offers various hardware, software and support services to select target markets to sell more products to more people more often.
By using a segmentation approach, a company can more precisely match the needs and wants of the customer and generate more sales. That’s why soft drink manufacturers have moved away from the undifferentiated approach and have introduced diet, caffeine free, and diet caffeine-free versions of their basic products. This approach also allows a company to target advertising more precisely.

Product Differentiation:
 Regardless of whether a marketer employs an undifferentiated or a segmentation approach, there remains a need to distinguish a brand from that of competitors. Most markets contain a high level of competition. How does a company compete in a crowed market? It uses Product Differentiation, as a competitive marketing strategy designed to create product differences that distinguish the company’s product from all others in the eyes of customers. Those perceived differences may be tangible or intangible. Product differentiation may also exist within segments.
Tangible differences include unique product feature, color, size, quality of performance or support services, or available options.
In instances where products really are the same (examples include milk, unleaded gas, and over the counter drugs), marketers often promote intangible differences. They create an image that implies difference, although the image may have little to do with the actual product features. Some beer companies, for example, try to suggest status, enjoyment, masculinity.
Determining what place a product should occupy in a given market is called positioning. It mean a marketer strategically combines the product’s tangible and intangible attributes in order to create a relative picture of the product.

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