Segmentation and Targeting Research Paper Example | Topics and Well Written Essays - 1000 words

Segmentation and Targeting - Research Paper ExampleStarbucks coffee and Jamaica aristocratical smokestack coffee social club are mapd as the bases of reference. Target markets for Starbucks coffee and Jamaica Blue Mountain coffee Starbucks coffee bunss a general local market. Its initial come out market was young college students, neighborhoods and kindly classes that would spend time with friends at their stores and gladly accept the idea of buying a $3 a cup of coffee. The initial focus included small towns, ethnic neighborhoods, highway rest shops, rural communities and as yet towns saturated with coffee shops. As a result of rapid growth, this sharpen market has expanded apace to include local buyers of all ages. On the other hand, the Jamaica Blue Mountain focuses on the export market. Its master(prenominal) target market is Japan though it wants to expand to include Canada. How the choice of target market influences the companys advance and pricing A company has to consider the buying power of its market. Miller (2006) explains that customers have different disposable income and this means they are different in terms of their sensitivity to prices. Market segmentation is therefore primary(prenominal) in determining if a company can raise its prices or not. If the company has to raise its prices, the geek of target market pull up stakes determine the level to which the company will raise its average prices. If the target market is very sensitive to prices, then a company could consider dropping its prices slightly so as to gain an extra market share. If it is insensitive to prices, then a slight increase for purposes of change magnitude profits margins will benefit since the increase will be indiscernible. According to Aaker et al (2000), the type of target market also determines promotion methods used. A company has to choose the promotion methods that will enable it to overhaul its target market quickly and adequately. Alternative metho ds include the TV, radio, billboards, direct marketing mail shot or the Internet. At the same time, the company has to consider how competitors do their promotions. They should then evaluate the efficiency of these methods and compare with those they use or intend to use. The type of target market also determines the frequency of these promotions. For example, markets that are highly rivalrous require frequent promotions in order to retain customer loyalty. Effects of introducing a new target market on consumer perceptions A company can introduce a new target market in a market that is already captured by its competitor. For example, Starbucks coffee can start producing brands for export to Japan, a market segment that is already captured by Jamaica Blue Mountain coffee. According to Kotler (2003) the perception here will be that the company has performed well in terms of pricing and its expansion is a sign that it is straight focusing on the quality of its products and expansion of its image. As a result of this, customers will tend to recrudesceicipator much with the company products so as to enjoy the anticipated high quality products and form part of this international or wide region market. The influenced of economic changes on purchase trends of customers The customers will not be influenced by changes in the economy because they will have already formed a perception that the company is already working on the quality of its products. This means that at fair prices, they will be enjoying more quality products and variety as well. This situation is reinforced by the