Question

(its a disscussion post of Introduction To Marketing 270)

1. Discuss the three factors that firms need to consider evaluating the appropriateness of market segments. Among those factors, which factor is the most important for you and why?

2. How can a company gain competitive advantage through differentiation (positioning)? Provide examples that illustrate each type of differentiation to establish an advantageous positioning in the mindset of consumers.

Answer 1

1. Three factors that firms need to consider to evaluate the appropriateness of a market segment are:

Competition

Market potential and

Cost

Competition deals with the number of other marketers who are also trying to convince the same segment to purchase their product. It is better to identify a segment where the competition is less.

Market potential deals with the expected capacity of the segment to purchase the product offered by the company . A market segment with good potential should be selected.

Cost is the amount of money spent by the company to attract the buyers of that segment. This involves expenditure on promotion tools and techniques.

Among the above mentioned three factors, the one factor that is of importance to me is the market potential. If the market potential is good and the customers are willing to buy the product then that segment will be an atttactive segment for me as I will be able to make more profits from that segment.

2) Differentiation is a marketing strategy in which the company is able to separately position itself in the minds of the customers. This can be done by marketing based on product features, quality, packaging etc. Example: Apple iphone has been able to occupy a differentiated position in the customer's mind by marketing based on product features and quality.