8 Identifying Market Segments and Targets Marketing Management

8 Identifying Market Segments and Targets Marketing Management, 13 th ed

Chapter Questions • What are the different levels of market segmentation? • How can a company divide a market into segments? • How should a company choose the most attractive target markets? • What are the requirements for effective segmentation? Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8 -2

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 marketing positioning Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8 -3

Four levels of Micromarketing • Segments: a group of customers who share similar needs and wants • Niches; narrow customer group seeking a distinctive mix of benefits (Avis) • Local Marketing (grassroots marketing); target market is leading to marketing program tailored to the needs and wants of local customers • Individuals; customization Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8 -4

What is a Market Segment? A market segment consists of a group of customers who share a similar set of needs and wants. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8 -5

Flexible Marketing Offerings • Naked solution: • Discretionary Product and service options: Some elements that all segment members value options but value; not all ; but charge for meal , snakes Airline offer economy passengers soft drink & a seat Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8 -6

Preference Segments • Homogeneous preferences exist when consumers want the same things • Diffused preferences exist when consumers want very different things • Clustered preferences when natural segments from groups with shared preferences emerged. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8 -7

What is Customerization? 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. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8 -8

Segmenting Consumer Markets • • Geographic : table 8. 1 Demographic: table 8. 1 Psychographic Behavioral Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8 -9

Demographic Segmentation • • • Age and life cycle; Life stage; single , married, family, Gender; male ; female Income Generation; Social class Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8 -10

Behavioral Segmentation Decision Roles • Initiator • Influencer • Decider • Buyer • User Behavioral Variables • Occasions • Benefits • User Status • Usage Rate • Buyer-Readiness aware • Loyalty Status; • Attitude; positive Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8 -11

The Brand Funnel Illustrates Variations in the Buyer-Readiness Stage • • • Aware Ever tried Recent trial Occasional user Regular user Most often used Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8 -12

Loyalty Status • Hard-core: one brand all time • Split loyals : loyal to two or three brand • Shifting loyals: who shift from one brand to another • Switchers: who show no loyalty to any brand Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8 -13

Figure 8. 3 Behavioral Segmentation Breakdown Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8 -14

Segmenting for Business Markets table 8. 2 • • Demographic; type, size and location Operating variable; technology; capabilities Purchasing approaches; Situational factors; quick; specific or size of order • Personal characteristics; similar, taking risk or loyal Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8 -15

Steps in Segmentation Process • Need-based segmentation: group customers based on similarity needs • Segment identification: identify the base of segmentation • Segment attractiveness: growth, competitive intensely • Segment profitability: • Segment positioning • Segment acid test; test the attractiveness of each segment • Market mix strategy; 4 ps Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8 -16

Effective Segmentation Criteria • • • Measurable: size , purchasing power Substantial: large & profitable Accessible: reached Differentiable: different needs Actionable: effective program can be formulated Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8 -17

Evaluating Target Market Selection • Single –Segment concentration: Volkswagen • Selective Specialization : PG Crest for women • Product Specialization: Microscopes for Universities laboratories, government and other labs • Market Specialization: serving many needs for particular segment • Full market coverage: Microsoft ; soft ware market Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8 -18

Evaluating Target Market Selection Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8 -19

Evaluating Target Market Selection Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8 -20

Figure 8. 4 Patterns of Target Market Selection Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8 -21