Extend Profits, Not Product Lines

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Extend Profits, Not Product Lines

In order to successfully compete in today's unpredictable and aggressive business markets, mass marketing is no longer a practical option for most companies. Marketers must attack niche markets that exhibit specific needs and wants. Market segmentation is the process of partitioning markets into groups of potential customers with similar needs or characteristics who are likely to display similar purchase behavior. Market segmentation is the foundation on which all other marketing actions can be based. It requires a major commitment by management to customer-oriented planning, research, implementation, and control. The overall objective of using a market segmentation strategy is to improve your company's competitive position and better serve the needs of your customers. Some specific objectives may include increased sales, improves market share, and enhanced image. Line extensions come closer to meeting the needs of smaller and smaller market groups. They support pricing scale, aiming higher prices at select markets, with superior quality. They aid in fixing the excess capacity many firms are experiencing today. They offer short-term gain at low cost which accommodates to the desires of today's managers. Product line extensions also help to meet retailer's demands, providing packaging that will suit their precise marketing desires. A highly considered success factor is product superiority. It is impossible to follow every market opportunity so one must make strategic choices based on customer needs, competitive opportunities, corporate objectives, and your firm's financial, technical, and marketing resources. You may accomplish an effective position by searching out unique marketing advantages, seeking new market segments that competitors are not, or developing new approaches to old problems. Your position must be based on real or intangible competitive advantage. Product positioning is an important strategy for achieving differential advantage. A successful position has characteristics that are both differentiating and important to consumers. Positions are based upon consumer perceptions, which may or may not reflect reality. A position is effectively built by communicating a
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