| Summary: | Businesses have realised that they cannot appeal to all consumers in the
marketplace. Consumers are too numerous, geographically wide-spread, and
too varied in their needs and buying practices. Furthermore, the business&
themselves vary widely in their abilities to serve different segments of the
market. Businesses consequently conduct market segmentation to identify the
parts of the market that it can best serve and most profitably. Therefore, the
goal of this study was to determine the actual target markets of selected retailers
by means of the Living Standards Measure (LSM) tool, and to recommend
improved marketing strategies based on the Media Groups Measure (MGM) tool.
The objectives of the study were to describe market segmentation by
emphasising its importance and discussing the market segmentation process.
Further objectives include explaining the application of the LSM- and MGM-tools
in identifying target markets and selecting media to reach these target markets,
and to conduct an empirical investigation on the application of the LSM tool for
the selected retailers.
A market segmentation strategy concentrates the business' marketing efforts on
consumers who have a similar interest in the business' values. Therefore,
market segmentation enables the business to identify consumer needs more
accurately. The aforementioned assists the business in creating a basis for
developing products to satisfy consumer needs. The basis is developed by the
identification of the attributes that are of value to consumers.
Market segmentation furthermore assists in the development of an effective
marketing mix, tailored to the business' strategy and objectives. A proper
marketing mix can determine the promotional appeal, media choices, and the
prices consumers are willing to pay.
The LSM and MGM are only two of the variety of segmentation tools that can be
used to segment a heterogeneous market. The LSM is a relatively new and
unknown instrument - in comparison with other segmentation tools - and was
specifically developed for the South African market. It is furthermore a
multivariate segmentation tool, consisting of 29 household variables, which
excludes discriminators such as race and income. The MGM-tool is used to
obtain media consumption information on market segments. Its primary function
is to assist businesses in selecting media that are most effective in reaching their
target markets.
The most important conclusions of this study are that the current target markets
of Shoprite Checkers and Pick 'n Pay in Potchefstroom differs from their actual
target markets. Gender and age do not differentiate shoppers significantly, and
although race and income are not included as differentiators in the LSM index,
these two variables correlate strongly with the various LSM-groups.
Some of the most important recommendations include:
The headquarters of both retailers should consider developing
differentiated marketing strategies for stores in different locations.
Shoprite Checkers and Pick 'n Pay (in Potchefstroom) should both target
SU-LSM groups 6 to 10.
Both retailers should adapt their marketing efforts in order to provide for
the local market in Potchefstroom.
The recommendations will enable the retailers to enhance their business and
marketing efforts, and accordingly satisfy the needs of their customers. === Thesis (M.Com. (Marketing))--North-West University, Potchefstroom Campus, 2005.
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