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Key components


The key components of 'strategic planning' include an understanding of the firm's vision, mission, values and strategies. The vision and mission are often captured in a Vision Statement and Mission Statement.

  • Vision: outlines what the organization wants to be, or how it wants the world in which it operates to be (an "idealised" view of the world). It is a long-term view and concentrates on the future. It can be emotive and is a source of inspiration. For example, a charity working with the poor might have a vision statement which reads "A World without Poverty."

  • Mission: Defines the fundamental purpose of an organization or an enterprise, succinctly describing why it exists and what it does to achieve its vision. For example, the charity above might have a mission statement as "providing jobs for the homeless and unemployed".

  • Values: Beliefs that are shared among the stakeholders of an organization. Values drive an organization's culture and priorities and provide a framework in which decisions are made. For example, "Knowledge and skills are the keys to success" or "give a man bread and feed him for a day, but teach him to farm and feed him for life". These example values may set the priorities of self sufficiency over shelter.

  • Strategy: Strategy, narrowly defined, means "the art of the general." A combination of the ends (goals) for which the firm is striving and the means (policies) by which it is seeking to get there. A strategy is sometimes called a roadmap which is the path chosen to plow towards the end vision. The most important part of implementing the strategy is ensuring the company is going in the right direction which is towards the end vision.


Market segmentations


Target markets are groups of individuals separated by distinguishable and noticeable aspects. Target markets can be separated into:

• Geographic segmentations, addresses (their location climate region)

• Demographic/socio-economic segmentation (gender, age, income, occupation, education, household size, and stage in the family life cycle)

• Psychographic segmentation (similar attitudes, values, and lifestyles)

• Behavioural segmentation (occasions, degree of loyalty)

• Product-related segmentation (relationship to a product)


Criteria for Segmenting


An ideal market segment meets all of the following criteria:

  • It is possible to measure.

  • It has to be large enough to earn profit.

  • It has to be stable enough that it does not vanish after some time.

  • It is possible to reach potential customer via organization's promotion and distribution channel.

  • It is internally homogeneous (potential customers in the same segment prefer the same product qualities).

  • It is externally heterogeneous that is Heterogeneity between segments (potential customers from different segments have basically different quality preferences).

  • It responds similarly to a market stimulus.

  • It can be cost-efficiently reached by market intervention.

  • useful in deciding on marketing mix


Basis for segmenting consumer markets

Geographic segmentation


The market is segmented according to geographic criteria- nations, states, regions, countries, cities, neighbourhoods, or zip codes. Geo-cluster approach combines demographic data with geographic data to create a more accurate profile of specific With aspect of region, in rainy regions you can sell things like raincoats, umbrellas and gumboots. In hot regions you can sell summer wear. In cold regions you can sell warm clothes

Demographic Segmentation


Demographic segmentation consists of dividing the market into groups based on variables such as age, gender, family size, income, occupation, education, religion, race and nationality.

As you might expect, demographic segmentation variables are amongst the most popular bases for segmenting customer groups.

This is partly because customer wants are closely linked to variables such as income and age. Also, for practical reasons, there is often much more data available to help with the demographic segmentation process.

Psychographic Segmentation


Psychographics is the science of using psychology and demographics to better understand consumers. Psychographic segmentation: Consumers are divided according to their lifestyle, personality, values. Aliens within the same demographic group can exhibit very different psychographic profiles.[2]

"Positive" market segmentation


Market segmenting is dividing the market into groups of individual markets with similar wants or needs that a company divides into distinct groups which have distinct needs, wants, behaviour or which might want different products & services. Broadly, markets can be divided according to a number of general criteria, such as by industry or public versus private. Although industrial market segmentation is quite different from consumer market segmentation, both have similar objectives. All of these methods of segmentation are merely proxies for true segments, which don't always fit into convenient demographic boundaries.

Consumer-based market segmentation can be performed on a product specific basis, to provide a close match between specific products and individuals. However, a number of generic market segment systems also exist, e.g. the system provides a broad segmentation of the population of the United States based on the statistical analysis of household and geodemographic data.

The process of segmentation is distinct from positioning (designing an appropriate marketing mix for each segment). The overall intent is to identify groups of similar customers and potential customers; to prioritize the groups to address; to understand their behaviour; and to respond with appropriate marketing strategies that satisfy the different preferences of each chosen segment. Revenues are thus improved.

Improved segmentation can lead to significantly improved marketing effectiveness. Distinct segments can have different industry structures and thus have higher or lower attractiveness

Once a market segment has been identified (via segmentation), and targeted (in which the viability of servicing the market intended), the segment is then subject to positioning. Positioning involves ascertaining how a product or a company is perceived in the minds of consumers.

This part of the segmentation process consists of drawing up a perceptual map, which highlights rival goods within one's industry according to perceived quality and price. After the perceptual map has been devised, a firm would consider the marketing communications mix best suited to the product in question.


Behavioural Segmentation


In behavioural segmentation, consumers are divided into groups according to their knowledge of, attitude towards, use of or response to a product. It is actually based on the behaviour of the consumer.

Occasions


Segmentation according to occasions. We segment the market according to the occasions.

Benefits


Segmentations according to benefits sought by the consumer.


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