Segmentation, Targeting and Differentiation

Prepared and Presented by:

Lyncia Noronha 40

Palak Goyal 42

SYBMS

Segmentation

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Meaning

Market segmentation is a marketing strategy that involves dividing a broad target market into subsets of consumers who have common needs, and then designing and implementing strategies to target their needs and desires using media channels and other touch-points that best allow to reach them.

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Product differentiation

Market segments allow companies to create product differentiation strategies to target them.

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Market Segmentation Strategies

Traditional Approaches to Market Segmentation Mass Marketing Differentiated Marketing

Multisegment Approach Market Concentration Approach

Niche Marketing

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Bases for SegmentingConsumer Markets

Behavioral Segmentation Segments based on actual behavior or

product usage Demographic Segmentation

Segments based on demographic factors (e.g., gender, age, income, education, etc.)

Psychographic Segmentation Segments based on state-of-mind issues

(e.g., motives, attitudes, opinions, values, lifestyles, interests, personality, etc.)

Geographic Segmentation Segments based on geographic location

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Segmenting Consumer Markets

Sometimes, multiple attributes are combined to form segments

Multi-attribute segmentation via geoclustering combines multiple variables to identify smaller, better-defined target groups PRIZM Geoclustering system uses

demographic, geographic, lifestyle, and behavioral characteristics

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Segmenting Business Markets

Rackman and Vincentis proposed a segmentation scheme that classifies business buyers into three groups: Price-oriented customers: best served via

transactional selling Solution-oriented customers: best served by

means of consultative selling Strategic-value customers: best served by

means of enterprise selling

Segmentation, Marketing Mix, and Targeting

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Creating the Marketing Mix

PRODUCT

PLACE

PROMOTION

PRICE

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Goals for Marketing Mix

Create synergies Use resources

effectively Maintain consistent and

differentiated image Link to specific

marketing goals and objectives

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Mass Marketing Strategy

SingleMarketing Mix

All Customersin the Market

Product

Price Distribution

Promotion

Undifferentiated

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Multisegment Strategy

MultipleMarketing

Mixes

More Than OneMarket

Segment

Product

Price Distribution

Promotion

Product

Price Distribution

Promotion

Differentiated

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Market Concentration Strategy

SingleMarketing Mix Focused on a Single

Market Segment

Product

Price Distribution

Promotion

Differentiated

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Niche Marketing Strategy

SingleMarketing Mix

Focused on a SmallNiche Market Segment

Product

Price Distribution

Promotion

Differentiated

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Customized Marketing Strategy

UniqueMarketing

Mixes

IndividualCustomer

s

Product

Price Distribution

Promotion

Product

Price Distribution

Promotion

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Five basic strategies for target market selection: (1) Single Segment Targeting (2) Selective Targeting (3) Mass Market Targeting (4) Product Specialization (5) Market Specialization

Target Marketing Strategies

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Basic Target Marketing Strategies

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Can you think of a product that could be marketed effectively using a mass marketing approach? If so, explain and justify your answer. If not, what types of changes would have to be made to the product to make it appropriate for a mass marketing approach?

Discussion Question

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Discussion Question

Many consumers and consumer advocates are critical of the one-to-one marketing approach due to personal privacy concerns. Marketers counter that one-to-one marketing can lead to privacy abuses, but that the benefits to both consumers and marketers far outweigh the risks. Where do you stand on this issue? Why?

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Discussion Question

What are some of the ethical and legal issues involved in targeting sensitive groups such as children and seniors?

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