National Institute of Technology 2009 M.B.A Finance KETING MANAGEMENT - Question Paper

MARKETING MANAGEMENT
Q.1: A) What criteria can a company use to select the most option target market?
ANS:
Once the firm has identified its market-segment opportunities, it has to decide how many and which ones to target. Marketers are increasingly combining several variables in an effort to identify smaller, better-defined target groups. Thus, a bank may not only identify a group of wealthy retired adults, but within that group distinguish several segments depending on current income, assets, savings, and risk preferences. This has led a few market researchers to advocate a need- based market segmentation approach.
Effective segmentation criteria
Not all kinds of segmentation are useful. It is important to recognize that a marketer needs to use relevant variables to segment a market. For example, segmenting a market based on a person’s age is not relevant for a product like salt. Instead, the lifestyle and usage habits may be more relevant for segmenting its market. a few consumers may look for “free flowing” property of salt. Others may prefer table salt fortified with iodine. (In India, it is mandatory to sell salt fortified with iodine as prevention from goiter, a disease affecting the thyroid gland due to iodine deficiency). People who suffer from high blood pressure may prefer “health” salt that contains lesser volume of sodium chloride.
To be useful, market segments must rate favorably on 5 key criteria:
Measurable: The size, purchasing power, and characteristics of the segments can be measured.
Substantial: The segments are large and profitable enough to serve. A segment should be the largest possible homogeneous group worth going after with a tailored marketing program. It would not pay, for example, for an automobile manufacturer to develop cars for people who are less than 4 feet tall.
Accessible: The segments can be effectively reached and served.
Differentiable: The segments are conceptually distinguishable and response differently to various marketing-mix elements and programs. If married and unmarried women respond similarly to a sale on perfume, they do not constitute separate segments.
Actionable: Effective programs can be formulated for attracting and serving the segments.
Evaluating and Selecting the Market Segments
In evaluating various market segments, the firm must look at 2 factors: the segments overall attractiveness and the company’s objectives and resources. How well does a potential segment score on the 5 criteria? Does a potential segment have characteristics that make it generally attractive, such as size, growth, profitability, scale economies, and low risk? Does investing in the segment make sense provided the firm’s objectives, competencies, and resources? a few attractive segments may not mesh with the company’s long-run objectives or the company may lack 1 or more necessary competencies to offer superior value.

Earning:   Approval pending.