8 Identifying Market Segments and Targets Marketing Management

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

Benefits of Segmentation • • Effective use of resources Gain a focus Create Value for a target market Positioning

Step 1. Market Segmentation Levels of Market Segmentation Through Market Segmentation, Companies Divide Large, Heterogeneous Markets into Smaller Segments that Can be Reached More Efficiently And Effectively With Products and Services That Match Their Unique Needs. Segment Marketing Different products to one or more segments (some segmentation, i. e. Marriott) Market Segmentation 1. Identify bases for segmenting the market 2. Develop segment profiles

Market-Segmentation Procedure ¶Survey • Motivations • Attitudes • Behavior ·Analysis • Factors • Clusters ¸Profiling

Four levels of Micromarketing Segments Niches Local areas Individuals

Bases for Segmenting Consumer Markets Geographic Region, City or Metro Size, Density, Climate Demographic Age, Gender, Family size and Fife cycle, Race, Occupation, or Income. . . Psychographic Lifestyle or Personality Behavioral Occasions, Benefits, Uses, or Attitudes

Steps in Market Segmentation, Targeting, and Positioning Market Targeting 3. Develop measure of segment attractiveness 4. Select target segments

Step 1. Market Segmentation Segments must respond differently to different marketing mix elements & programs Requirements Measurable Accessible for effective segmentation • Size, purchasing power, profiles of segments can be measured. • Segments can be effectively reached and served. Substantial • Segments are large or profitable enough to serve. Actionable • Effective programs can be designed to attract and serve the segments.

Five Patterns of Target Market Selection Single-segment concentration M 1 M 2 M 3 Product specialization Selective specialization M 1 M 2 M 3 P 1 P 2 P 2 P 3 P 3 P 1 Market specialization Full market coverage M 1 M 2 M 3 P = Product M = Market M 1 M 2 M 3 P 1 P 2 P 3

Evaluating Market Segments • Segment size and growth • Segment structural attractiveness • Company objectives and resources