marketing management (mkt 511) delivered by: dr. shilpa iyanna · in behavioral segmentation,...
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Marketing Management (MKT 511)
Delivered by: Dr. Shilpa Iyanna
8
Identifying Market
Segments and Targets
1
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 8-3
Chapter Questions
What are the different levels of market
segmentation?
How can a company divide a market into
segments?
What are the requirements for effective
segmentation?
How should business markets be segmented?
How should a company choose the most
attractive target markets?
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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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What is a Market Segment?
A market segment consists of a group
of customers who share a similar set of
needs and wants.
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Segmenting Consumer Markets
Geographic
Demographic
Psychographic
Behavioral
Geographic Segmentation
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Markets are divided into
geographical units such
as nations, states,
regions, counties, cities,
or neighborhoods. The
company can operate in
one, few, or all areas but
pay attention to local
variations.
http://www.huffingtonpost.com/2012/09/04/vegetaria
n-meat-free-mcdonalds-fast-food-chain-india_n_1855300.html
http://www.aboutmcdonalds.com/country/map.html
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Claritas’ Prizm http://www.claritas.com/MyBestSegments/Default.jsp?ID=30&menuOption=segmentexplorer&pageName=Segment%2
BExplorer&id1=1027
Some approaches combine geographic data with
demographic data to yield even richer
descriptions of consumers and neighborhoods.
The groupings take into consideration 39 factors
in five broad categories:
Education and affluence
Family life cycle
Urbanization
Race and ethnicity
Mobility
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Demographic Segmentation
Demographic variables are popular because they’re
often associated with consumer needs and wants;
easy to measure; and helps estimate the size of the
market .
Age and life cycle
Life stage
Gender
Income
Generation
Social class
Race and Culture
Age and Lifecycle Stage
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Gender and Income
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Generational Influences
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Each generation or cohort
is profoundly influenced by
the times in which it grows
up—the music, movies,
politics, and defining events
of that period.
Race and Culture
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http://www.godubai.c
om/dining/
Psychographic Segmentation
and The VALS Framework
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In psychographic
segmentation, buyers
are divided into different
groups on the basis of
psychological/
personality traits,
lifestyle, or values http://www.strategicbusinessinsights.com
/vals/presurvey.shtml
http://www.scribd.com/doc/13138719/Por
sche-Psychological-Segmentation
Behavioral Segmentation Based
on Needs and Benefits
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In behavioral segmentation, marketers divide
buyers into groups on the basis of their
knowledge of, attitude towards, use of, or
response to a product.
Not everyone who buys a product has the same
needs or wants the same benefits. Needs-based or
benefits-based segmentation identifies distinct
marketing segments with clear marketing
segmentations. http://www.colgate.com/app/CP/US/EN/OC/Products/Toothpastes.cvsp
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Behavioral Segmentation:
Decision Roles
Initiator
Influencer
Decider
Buyer
User
Behavioral Segmentation:
Behavioral Variables (User and
Usage)
Occasions
Benefits
User Status
Usage Rate
Buyer-Readiness
Loyalty Status
Attitude
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Figure 8.2 Example of a Brand Funnel
(buyer-readiness stage)
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Loyalty Status
Hard-core
Split loyals
Shifting loyals
Switchers
Figure 8.3 Behavioral
Segmentation Breakdown
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Segmenting for Business Markets
Demographic (industry; company size; geographic
area)
Operating variable (technology; user status; etc.)
Purchasing approaches (Purchasing-function
organization; power structure; purchasing policies etc.)
Situational factors (Urgency; size of orders etc.)
Personal characteristics (buyer-seller similarities;
attitude towards risk etc.)
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Steps in Segmentation Process
Need-based segmentation
Segment identification
Segment attractiveness
Segment profitability
Segment positioning
Segment acid test
Market mix strategy
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Effective Segmentation Criteria
Measurable (e.g. size; purchasing power)
Substantial (large and profitable)
Accessible (easy to reach and serve)
Differentiable (segments should respond differently
to marketing mix)
Actionable (formulate programs to attract and serve)
Porter’s 5 Forces Model – Measure
Attractiveness of segments
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Threat of Rivalry
Threat of Supplier
Bargaining Power
Threat of Buyer
Bargaining Power
Threat of
New Entrants
Threat of
Substitutes
Figure 8.4 Possible Levels
of Segmentation
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Full market coverage – differentiated marketing;
undifferentiated marketing
Multiple segment specialization – super
segments; product specialization; market specialization
Single Segment - niche
Individual Segment – mass customization
Thank you !!
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