identifying market segments and targets

MARKETING MANAGEMENT14th edition

8

Identifying Market

Segments and

Targets

Effective Targeting Requires…

• Identify and profile distinct groups of buyers

who differ in their needs and preferences.

• Select one or more market segments to

enter.

• Establish and communicate the distinctive

benefits of the market offering.

Steps in Market Segmentation,

Targeting, and Positioning

Market Segmentation1. Identify bases for

segmenting the market2. Develop segment profiles

Market Targeting3. Develop measure of

segment attractiveness4. Select target segments

Market positioning5. Develop positioning for

target segments6. Develop a marketing

mix for each segment

Four levels of Micromarketing

Segments

Local areas Individuals

Niches

Segment Marketing

Targeting a group of customers

who share a similar set of

needs and wants.

CHP: 8&10-6

Basic Market Preference Patterns

Customerization

Combines operationally driven

mass customization with customized

marketing in a way that empowers

consumers to design the

product and service offering

of their choice.

Segmenting Consumer Markets

Geographic

Demographic

Psychographic

Behavioral

Demographic Segmentation

Age and Life Cycle

Life Stage

Gender

Income

Generation

Social Class

Psychographic

Segmentation:

The VALS

Segmentation

System

Behavioral Segmentation

Decision Roles

• Initiator

• Influencer

• Decider

• Buyer

• User

Behavioral Variables

• Occasions

• Benefits

• User Status

• Usage Rate

• Buyer-Readiness

• Loyalty Status

• Attitude

Behavioral

Segmentation Breakdown

Segmenting for Business Markets

Demographic

Operating Variable

Purchasing Approaches

Situational Factors

Personal

Characteristics

Segmenting for Business Markets

• Demographic segmentation

– Industry, company size, location

• Operating variables

– Technology, usage status,

customer capabilities

• Purchasing approaches

• Situational factors

– Urgency, specific application, size

of order

• Personal characteristics

– Buyer-seller similarity, attitudes

toward risk, loyalty

• Size, purchasing power, profiles of segments can be measured.

• Segments can be effectivelyreached and served.

• Segments are large or profitable enough to serve.

Measurable

Accessible

Substantial

Differential

Actionable

• Segments must respond differently to different marketing mix elements & programs.

• Effective programs can be designed to attract and serve the segments.

Effective Segmentation

Criteria

Market TargetingEvaluating Market Segments

• Segment Size and Growth

– Analyze current sales, growth rates and expected profitability for various segments.

• Segment Structural Attractiveness

– Consider effects of: competitors, availability of substitute products and, the power of buyers & suppliers.

• Company Objectives and Resources

– Company skills & resources needed to succeed in that segment(s).

– Look for Competitive Advantages.

CHP: 8&10-17

Segment 1

Segment 2

Segment 3

Segment 1

Segment 2

Segment 3

CompanyMarketing

Mix

CompanyMarketing

Mix

CompanyMarketing Mix 1

CompanyMarketing Mix 2

CompanyMarketing Mix 3

Market

A. Undifferentiated Marketing

B. Differentiated Marketing

C. Concentrated Marketing

Market TargetingMarket Coverage Strategies

CHP: 8&10-18

Patterns of Target Market Selection

CHP: 8&10-19

Patterns of Target Market Selection

CHP: 8&10-20

Patterns of Target Market Selection