identifying market segments and targets
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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
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