sultan ahmed topic 05. sultan ahmed you would be able to answer the following questions after...

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Topic 05

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You would be able to answer the following questions after reading the chapter:

Definitions: segment marketing, customerization, • What are the different levels/steps of market

segmentation?• In what ways can a company divide a market into

segments?• Explain the characteristics of demographic

segmentation with examples.• Explain the characteristics of behavioral segmentation

with examples.• What are the requirements for effective segmentation?• How should business markets be segmented?• How should a company choose the most attractive

target markets? How market coverage strategies influence market targeting?

Learning Goals of the Topic

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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.

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Steps in Market Segmentation, Targeting, and Positioning

Market Segmentation

1. Identify bases for segmenting the market2. Develop segment profiles

Market Segmentation

1. Identify bases for segmenting the market2. Develop segment profiles

Market Targeting3. Develop measure of segment attractiveness4. Select target segments

Market Targeting3. Develop measure of segment attractiveness4. Select target segments

Market positioning5. Develop positioning for target segments6. Develop a marketing mix for each segment

Market positioning5. Develop positioning for target segments6. Develop a marketing mix for each segment

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Four levels of Micromarketing

Segments

Local areas Individuals

Niches

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Segment Marketing

Targeting a group of customerswho share a similar set of

needs and wants.

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Basic Market Preference Patterns

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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.

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Segmenting Consumer Markets

GeographicGeographic

DemographicDemographic

PsychographicPsychographic

BehavioralBehavioral

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Demographic Segmentation

Age and Life CycleAge and Life Cycle

Life StageLife Stage

GenderGender

IncomeIncome

GenerationGeneration

Social ClassSocial Class

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Behavioral Segmentation

Decision Roles

• Initiator

• Influencer

• Decider

• Buyer

• User

Behavioral Variables

• Occasions

• Benefits

• User Status

• Usage Rate

• Buyer-Readiness

• Loyalty Status

• Attitude

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Behavioral Segmentation Breakdown

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Segmenting for Business Markets

DemographicDemographic

Operating VariableOperating Variable

Purchasing ApproachesPurchasing Approaches

Situational FactorsSituational Factors

PersonalCharacteristics

PersonalCharacteristics

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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

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

• Segments can be effectively reached and served.

• Segments are large or profitable enough to serve.

Measurable Measurable

AccessibleAccessible

SubstantialSubstantial

DifferentialDifferential

ActionableActionable

• Segments must respond differently to different marketing mix elements & programs.• Effective programs can be designed to attract and serve the segments.

Effective Segmentation Criteria

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Market Targeting Evaluating 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.

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Segment 1Segment 1

Segment 2Segment 2

Segment 3Segment 3

Segment 1Segment 1

Segment 2Segment 2

Segment 3Segment 3

CompanyMarketing

Mix

CompanyMarketing

Mix

CompanyMarketing

Mix

CompanyMarketing

Mix

CompanyMarketing Mix 1

CompanyMarketing Mix 1

CompanyMarketing Mix 2

CompanyMarketing Mix 2

CompanyMarketing Mix 3

CompanyMarketing Mix 3

MarketMarket

A. Undifferentiated Marketing

B. Differentiated Marketing

C. Concentrated Marketing

Market Targeting Market Coverage Strategies

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Patterns of Target Market Selection

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Patterns of Target Market Selection

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Patterns of Target Market Selection