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INTRODUCTION
The pursuit of higher market share through various promotional gimmicks to stimulate brand switching proved to be expensive. With a plethora of product offerings, minimal differentiation in product features, and "me too" ad campaigns, market share has more often than not been fought on short-term sales promotion such as coupons and rebates. Couponing, the promotional buzzword of the early 1980s, has not lived up to its promise; rather it has further diluted brand loyalty.(6)
The emphasis on producing, marketing, and advertising to a large homogeneous market is increasingly less effective, mainly because a massive upheaval in the social landscape, has fragmented the mass market.(9,10) Some aspects of this social upheaval are increased number of women in the workforce, the changing family unit, the aging of the population, the rise in the ethnic population, and the shrinkage of the middle class. These changes have stimulated the search for new ways to deal with the fragmented market. Niche marketing, database marketing, and relationship marketing are promising strategies that are attracting a high level of attention, as alternatives to market segmentation.(10) However, these concepts have evolved independently from different perspectives. Consequently, little attention was paid to the fact that they might complement each other, and their integration may lead to a synergy and the creation of a powerful marketing tool to deal with the changing marketing environment.
DEFINITIONS
It is necessary to distinguish clearly between segmentation and niche marketing, and between database marketing and relationship marketing. Each definition below integrates various aspects and popular practices that have been suggested in the past.
SEGMENTATION
Segmentation is the process of breaking a large market into smaller and more manageable submarkets. The objective is to identify homogeneous submarkets that are significantly different from each other. The organization picks one or more of the identified segments and treats each as "a small mass market."
NICHE MARKETING
Niche marketing, or nichemanship, is the process of carving out a small part of the market whose needs are not fulfilled. By specializing along market, customer, product, or marketing mix lines, a company can match the unique needs.(11)
DATA MARKETING
Database marketing, simply put, involves the collection of information about past, current, and potential customers to build a database to improve the marketing effort. The...