Core Concepts of Marketing

APPROACHINGTHEMARKET 45

tionorpersuasion,constitutea segment.It is furtherassumedthatthisneedexists

ina largeenoughquantitytojustifya separatesegmentationstrategy.Thiscrite-

rionrequirestheabilitytomeasureboththeintensityoftheneedandthestrength

ofthepurchasingpowersupportingit.A40-storybuildinghasa clearneedfor

elevators.

3. Effectivedemand:Itisnotenoughforanactualorpotentialneedtoexist;pur-
   chasingpowermustalsoexist.Needspluspurchasingpowercreateeffective
   demand.Theabilitytobuystemsfromincome, savings,andcredit.Purchasing
   powerderivedfromoneormoreofthesethreesourcesmustbelongtothemem-
   bersofa marketsegmentinorderforittorepresenta meaningfulmarketingoppor-
   tunity.Thepossessionofa validVisaorothercreditcardmeetsthiscriteriafor
   mostproducts.


4. Economicaccessibility:Theindividualsina marketsegmentmust bereachable
   andprofitable.Forexample,segmentscouldbeconcentratedgeographically, shop
   atthesamestores,orreadthesamemagazines.Regrettably,manyimportant
   segments-thosebasedonmotivationalcharacteristics,forinstance- cannotbe
   reachedeconomically.Theelderlyrichrepresentsucha segment.


5. Positive response:A segmentmustreactuniquelytomarketingefforts.Theremust
   bea reasonforusingdifferentmarketingapproachesinthevarioussegments.Dif-
   ferentsegments, unlesstheyrespondinuniquewaystoparticularmarketinginputs,
   hardlyjustifytheuseofseparatemarketingprograms.

TheStrategyofMarketSegmentation

Duringthelasttwodecades,a morecompleteandconciseunderstandingofmarketseg-
mentationhasemerged.Thisisnottosaythattherearenotstillunsettledissues,meas-
urementproblems,andotherissuestoconsider.Themostsevereproblemremainsthe
difficultyofdefiningpreciselythebasisforsegmentation.A greatdealofknowledgeabout
themarketandconsiderableexperiencewithit arehighlydesirable.Researchintoconsumer
motivationisessential.Thisdoesnotmeanthathistorical, descriptivedataaboutconsumers
arenolongerimportant.Nevertheless,theultimatepurposeofgoingthroughtheprocess
ofdelineatingmarketsegmentsistoselecta targetmarketormarkets:otherwise,theseg-
mentationprocessisworthless.
Thesegmentalapproachwillbedescribedthroughoutthetextingreaterdetail.At
thispoint,it is sufficienttoknowthatthesegmentationstrategyistheprimarymarketing
approachusedbya majorityofproducers.Combinedwithproductdifferentiation,it is the
essenceofa contemporarymarketingstrategy.Theactivityofselectinga targetmarket
involvesfivesteps:

1. Identifyrelevantperson/organizationandpurchasesituationvariablesbeyondthe
   coreproductvariable. (ForMinolta'sMaxxumSLRCamera,thecoreproductvari-
   ablewouldbefool-proofphotographs,andotherrelevantvariablesmightbeage,
   income,familycomposition,occasionforuse,andphotographicexperience.)


2. Collectandanalyzeotherrelateddataaboutpotentialsegments(e.g.,character-
   isticsofneophytecamerausers,priceperceptionsofthesepotentialusers,sizeof
   group,trends, minimumproductfeatures).
   3.Applycriteriaofa goodsegment.