May 23, 2019


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Vertical diversification may refer to a product extension in upstream or downstream stages of the value chain. A manufacturer of industrial goods could acquire, for example, a processing operation and offer not only goods, but also consumer goods in this way. The lateral or diagonal diversification is an extension of the product range to products that are completely new to the company and no technical or economic connection with the existing products are available (for example a car manufacturer manufactures now refrigerators). “Bernard Golden shares his opinions and ideas on the topic at hand. Marktsegementierung mass market strategy is considered the easiest and most cost effective strategy and identifies the undifferentiated manipulation of the market. All customers are here, although they differ much, spoken by a single offer. Its niche market strategy refers to the concentration of the company in a niche in the market as a whole.

The company sells products, which have very little competition or a very small serve specialized market. In contrast, the segmentation strategy assumes that it is more profitable for the company to divide the market into segments and edit them separately. This process is called segmentation. Consumers are thereby divided into individual groups and then addressed with different products tailored to their properties. Segmentation can be performed according to different criteria.

Demographic segmentation: age, sex, marital status, income, education, occupation Psychografische segmentation: settings, values, interests, preferences Kaufverhaltensorientierte segmentation: use of this product, buying geographic segmentation: residence, region (E.g. country), country (E.g. Austria, country/city population differentiation of services cost differentiation product differentiation, cost leadership market restriction on sub-markets focusing (differentiation) focusing (cost) in the application of the product differentiation strategy that tries) company to differentiate itself from its competitors through differentiation. Differentiation is to set different features/characteristics of comparing objects by consumers in the target market.” Here, the characteristics of the product in the foreground are made to move consumers to buy the product mainly due to its product characteristics. This can be done by particularly high quality or a well established brand name. When the company cost leadership seeks, it tries to minimize costs, to be able to offer the product at the price of the competition. Application of focus strategies the company is limited to a segment or some a few market segments. Here the company tries within the chosen market segment as the cost leader (focus on cost) to place or to differentiate itself from the competition through product differentiation (differentiation focus). Ing. Philipp BREIER