segment at ions

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MARKET SEGMENTATION



Market Segmentation

DETERMINE CONSUMER NEEDS AND WANTS

DIVIDE MARKETS ON RELEVANT DIMENSIONS

DEVELOP PRODUCE POSITIONING

DECIDE SEGMENTATION STRATEGY

DESIGN MARKETING MIX STRATEGY



Meeting the Consumer Needs

Successful marketing strategies depend on meeting consumer

needs and wants

> Seek to discover broad variety of unmet needs

> Operate within your firms need satisfaction activities

> Need and wants usually are translated into more operational

concepts



Consumer Market Segmentation

Customers can be divided or segmented by using . . .

Geography

Demography

Sociography

Behavior



Segmentation Timing

Priority Segmentation

- Segmentation is decided in advance of doing any research on a

market

Post hoc Segmentation

- People are grouped into segments based on research findings



Psychographic Segmentation

VALS 2 ( values and lifestyles)

Is based on two national surveys of 2,500 consumers who

responded to 43 lifestyle questions.

The first survey segmented the population and the second

validated it



ACTUALIZERS

FULFILLEDS ACHIEVERS EXPERIENCERS

BELIEVERS STRIVERS MAKERS

STRUGGLERS

Principle Oriented Status Oriented Action Oriented

VALS 2 - Eight American Lifestyles

Abundant Resources

Minimal Resources



Geodemographic Segmentation

PRIZM

-Potential Ranking Index by Zip Markets

-PRIZM assumes that similar customers live within the same or

proximate neighborhood(s)

-PRIZM classifies every U.S. neighborhood into one of 62 distinct

types or clusters of consumers

-PRIZM helps marketers understand customers in selected

markets



Product Positioning

Positioning can be achieved according to selected attributes or

functions.

Positioned by use or application

Positioned in terms of particular types of users

Positioned relative to a product class



Market Segmentation Strategies

1. The firm may decide not to enter the market

2. The firm may not decide to segment but to be a mass

marketer

W hen?

> The market is so small its not profitable to market to one

portion of it

> Heavy users comprise so much of sales they are the only

relevant target

> Dominant brand does not need segmentation



Market Evaluation Questions

MEASURABILITY Questions

1. What are the appropriate bases for segmenting this

market and can they be measured?

2. Are secondary data available so this can be done

inexpensively?

3. If primary data are needed, will there be a return on

investment?4. Are specific names/addresses needed?

5. Can purchases by this segment be measured and

tracked?




MEANINGFULNESS Questions

1. How many people are in this market and how

frequently will they purchase the product?

2. What market share can we expect?

3. What is the growth potential

4. How strong is the competition and is it likely to

change?

5. How satisfied are the consumers in this market with

current offerings?




MARKETABILITY Questions

1. Can this segment be reached with current channels of

distribution?

2. Can we establish new channels efficiently, if needed?

3. What promotion media does this segment read, listen

to, or watch?

4. Can we afford to promote to this segment and is therea media to reach them?

5. Are people in this segment willing to pay a price

necessary for profit?

6. Can we produce a product for this market profitably?

segment at ions

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