One of the key aspects of strategy development is identifying the needs of customers and meeting these needs. The marketing plan determines how to achieve the mission of the organisation. The first step involves identifying why some customers are dissatisfied, this involves assessing what currently lacks in the product or services provided.
Market segmentation helps to identify the groups of customers with similar needs and it is usually used to target a specific group of people’s needs. Market segmentation involves identifying customer groups based on:
- Geographic variables – Includes Country size, climate etc.
- Demographic variables – Includes age, gender, sexual orientation, income religion and others.
- Psychographic variables – Includes personality, life-styles, values and attitudes.
- Behavioral variables – Includes brand loyalty, quality, decision making units and others.
From the market segmentation, the organisation has to identify a unique marketing mix which will allow the organisation to meet the specific needs of a target market. McCarthy grouped the variables in the marketing mix into four categories;
- Product – Includes Brand name, Packaging, Features, options, quality and service.
- Price – Includes level, discounts, allowances, delivery options and payment terms.
- Promotion – Includes Sales promotion, advertising and personal selling.
- Place – Distribution, outlet locations and inventory levels.