What is the target market segment strategy

Market segmentation

Division of the overall market according to certain criteria into buyer groups or segments, which should be as similar (homogeneous) as possible and as dissimilar (heterogeneous) as possible with regard to their purchasing behavior or characteristics relevant to purchasing behavior.

Main purpose Market segmentation is to uncover differences between buyers in order to draw conclusions for segment-specific marketing programs (marketing) (customer structure analysis). This results in two Subtasks: The market segments have to be defined (taxonomic market segmentation) and segment-specific strategies are developed and implemented (management-oriented market segmentation).

1. Market capture strategies with the help of purchasing behavior-relevant Segmentation criteria: a) Segmentation according to demographic (religion, gender, age, household size), according to socio-economic (income, schooling, occupation) and according to psychographic criteria (lifestyle, characteristics of personality).

b) Segmentation according to buying behavior and response characteristics (buyer, non-buyer, behavior with regard to non-price marketing instruments, price response, willingness to pay, price sensitivity, price setting and special offer response). The advantage of segmentation according to general buyer characteristics
(1) lies in the ease with which the criteria can be measured; their disadvantage is their relatively low prognostic relevance with regard to actual purchasing behavior. With a segmentation according to purchasing behavior and response characteristics
(2) the directly relevant criteria for a market segmentation are recorded directly, but are relatively difficult to observe and / or the segments formed on this basis cannot be specifically addressed. Therefore, one tries (3) to establish relationships between the segments defined according to purchasing behavior characteristics and the general buyer characteristics in order to then redefine the segments. The statistical methods used are mainly regression analysis, cluster analysis, discriminant analysis, AID analysis and multidimensional scaling (MDS).

2. Strategies for segment-specific market development: a) concentrated market strategy: processing only the most lucrative segment (market niche); b) differentiated marketing strategy: processing of several segments; c) selectively differentiated strategy: processing of less selected segments.

3. Market segmentation in capital goods marketing:Macro segmentation.

4. Market segmentation on an international level:International market segmentation.