TAILIEUCHUNG - Marketing Management - Market Segmentation

The concept of target marketing is a refinement of the basic philosophy of marketing. It is an attempt by companies to relate the characteristics or attributes of the goods and services they provide more closely to customer requirements. When mass production techniques were first introduced, out of necessity they imposed a large degree of uniformity upon consumers. | 2 TOPIC - MARKET SEGMENTATION THE DEVELOPMENT OF TARGET MARKETING AND MARKET SEGMENTATION AN OVERVIEW The concept of target marketing is a refinement of the basic philosophy of marketing. It is an attempt by companies to relate the characteristics or attributes of the goods and services they provide more closely to customer requirements. When mass production techniques were first introduced out of necessity they imposed a large degree of uniformity upon consumers. However such techniques also brought an improvement in most people s standards of living. Mass production reduced unit costs and resulted in cheaper goods. 3 What factors led to the development of Market Segmentation As consumers became more affluent their aspirations also increased. They were no longer satisfied with a car or a sewing machine but wanted a particular type of product with specific characteristics that suited their requirements more accurately. Advances in production technology made a degree of product differentiation possible with little reduction in the economics of scale of the former mass production techniques. The situation today is that while certain firms attempt to service an entire market for a particular product or service this tends to be the exception rather than the rule. 4 In such cases either the market in question is very specialised and relatively small or the firm enjoys some form of monopoly power. Many organisations operate in very large markets. Such firms recognise that the overall market is so large that it may not be possible to serve the entire population of that market effectively. The overall market may be geographically dispersed and the firm may lack the resources to service it properly. Very often the overall market for a particular product or service is too heterogeneous in terms of the purchasing requirements of individuals or organisations making up the market for any one firm to service adequately. By targeting on to specific groups of consumers or market .

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