CHAPTER 9 Identifying Market Segments and Targets Copyright

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CHAPTER 9 Identifying Market Segments and Targets Copyright © 2016 Pearson Education Ltd. 9

CHAPTER 9 Identifying Market Segments and Targets Copyright © 2016 Pearson Education Ltd. 9 -

LEARNING OBJECTIVES 1. 2. 3. 4. 5. In what ways can a company divide

LEARNING OBJECTIVES 1. 2. 3. 4. 5. In what ways can a company divide the consumer market into segments? How should business markets be segmented? How should a company choose the most attractive target markets? What are the requirements for effective segmentation? What are the different levels of market segmentation? Copyright © 2016 Pearson Education Ltd. 9 -2

BASES FOR SEGMENTING CONSUMER MARKETS • Market segment – A group of customers who

BASES FOR SEGMENTING CONSUMER MARKETS • Market segment – A group of customers who share a similar set of needs and wants Geographic segmentation Demographic segmentation Psychographic segmentation Behavioral segmentation Copyright © 2016 Pearson Education Ltd. 9 -3

GEOGRAPHIC SEGMENTATION • Geographical units – Nations, states, regions, counties, cities, or neighborhoods •

GEOGRAPHIC SEGMENTATION • Geographical units – Nations, states, regions, counties, cities, or neighborhoods • Nielsen Claritas’ PRIZM – Education and affluence – Family life cycle – Urbanization – Race and ethnicity – Mobility Copyright © 2016 Pearson Education Ltd. 9 -4

GEOGRAPHIC SEGMENTATION Copyright © 2016 Pearson Education Ltd. 9 -5

GEOGRAPHIC SEGMENTATION Copyright © 2016 Pearson Education Ltd. 9 -5

DEMOGRAPHIC SEGMENTATION Age & lifecycle stage Race & culture Life stage Gender Generation Income

DEMOGRAPHIC SEGMENTATION Age & lifecycle stage Race & culture Life stage Gender Generation Income Copyright © 2016 Pearson Education Ltd. 9 -6

DEMOGRAPHIC SEGMENTATION • Age and life-cycle stage – Our wants and abilities change with

DEMOGRAPHIC SEGMENTATION • Age and life-cycle stage – Our wants and abilities change with age • Life stage – A person’s major concern (e. g. , divorce) Copyright © 2016 Pearson Education Ltd. 9 -7

DEMOGRAPHIC SEGMENTATION • Gender – Men and women have different attitudes and behave differently

DEMOGRAPHIC SEGMENTATION • Gender – Men and women have different attitudes and behave differently • Income – Income segmentation is a long-standing practice Copyright © 2016 Pearson Education Ltd. 9 -8

DEMOGRAPHIC SEGMENTATION • Generation Millennials (Gen Y) Gen X Baby Boomers Silent Generation Copyright

DEMOGRAPHIC SEGMENTATION • Generation Millennials (Gen Y) Gen X Baby Boomers Silent Generation Copyright © 2016 Pearson Education Ltd. 9 -9

DEMOGRAPHIC SEGMENTATION • Race and culture Hispanic Americans Asian Americans African Americans LGBT Copyright

DEMOGRAPHIC SEGMENTATION • Race and culture Hispanic Americans Asian Americans African Americans LGBT Copyright © 2016 Pearson Education Ltd. 9 -10

PSYCHOGRAPHIC SEGMENTATION • Buyers are divided into groups on the basis of psychological/personality traits,

PSYCHOGRAPHIC SEGMENTATION • Buyers are divided into groups on the basis of psychological/personality traits, lifestyle, or values Copyright © 2016 Pearson Education Ltd. 9 -11

FIGURE 9. 1: VALS SEGMENTATION SYSTEM Copyright © 2016 Pearson Education Ltd. 9 -12

FIGURE 9. 1: VALS SEGMENTATION SYSTEM Copyright © 2016 Pearson Education Ltd. 9 -12

BEHAVIORAL SEGMENTATION • Marketers divide buyers into groups on the basis of their knowledge

BEHAVIORAL SEGMENTATION • Marketers divide buyers into groups on the basis of their knowledge of, attitude toward, use of, or response to a product Copyright © 2016 Pearson Education Ltd. 9 -13

BEHAVIORAL SEGMENTATION • Needs and benefits • Decision roles – Initiator – Influencer –

BEHAVIORAL SEGMENTATION • Needs and benefits • Decision roles – Initiator – Influencer – Decider – Buyer – User Copyright © 2016 Pearson Education Ltd. 9 -14

USER AND USAGE-RELATED VARIABLES Occasions User status Usage rate Attitude Loyalty status Buyerreadiness stage

USER AND USAGE-RELATED VARIABLES Occasions User status Usage rate Attitude Loyalty status Buyerreadiness stage Copyright © 2016 Pearson Education Ltd. 9 -15

FIGURE 9. 2 MARKETING FUNNEL Copyright © 2016 Pearson Education Ltd. 9 -16

FIGURE 9. 2 MARKETING FUNNEL Copyright © 2016 Pearson Education Ltd. 9 -16

FIGURE 9. 3 BEHAVIORAL SEGMENTATION BREAKDOWN Copyright © 2016 Pearson Education Ltd. 9 -17

FIGURE 9. 3 BEHAVIORAL SEGMENTATION BREAKDOWN Copyright © 2016 Pearson Education Ltd. 9 -17

HOW SHOULD BUSINESS MARKETS BE SEGMENTED? ü Demographic ü Operating variables ü Purchasing approaches

HOW SHOULD BUSINESS MARKETS BE SEGMENTED? ü Demographic ü Operating variables ü Purchasing approaches ü Situational factors ü Personal characteristics Copyright © 2016 Pearson Education Ltd. 9 -18

MARKET TARGETING Copyright © 2016 Pearson Education Ltd. 9 -19

MARKET TARGETING Copyright © 2016 Pearson Education Ltd. 9 -19

EFFECTIVE SEGMENTATION CRITERIA ü Measurable ü Substantial ü Accessible ü Differentiable ü Actionable Copyright

EFFECTIVE SEGMENTATION CRITERIA ü Measurable ü Substantial ü Accessible ü Differentiable ü Actionable Copyright © 2016 Pearson Education Ltd. 9 -20

PORTER’S FIVE FORCES Threat of Rivalry Threat of New Entrants Threat of Substitutes Threat

PORTER’S FIVE FORCES Threat of Rivalry Threat of New Entrants Threat of Substitutes Threat of Buyer Bargaining Power Threat of Supplier Bargaining Power Copyright © 2016 Pearson Education Ltd. 9 -21

EVALUATING & SELECTING THE MARKET SEGMENTS • Figure 9. 4: Possible Levels of Segmentation

EVALUATING & SELECTING THE MARKET SEGMENTS • Figure 9. 4: Possible Levels of Segmentation Copyright © 2016 Pearson Education Ltd. 9 -22

ONE-TO-ONE MARKETING Identify your prospects and customers Differentiate customers in terms of their needs

ONE-TO-ONE MARKETING Identify your prospects and customers Differentiate customers in terms of their needs and value to your company Interact to improve your knowledge about customers’ needs and to build relationships Customize products, services, and messages to each customer Copyright © 2016 Pearson Education Ltd. 9 -23

LEGAL AND ETHICAL ISSUES • Marketers must avoid consumer backlash – Labeling consumers –

LEGAL AND ETHICAL ISSUES • Marketers must avoid consumer backlash – Labeling consumers – Vulnerable groups – Disadvantaged groups – Potentially harmful products Copyright © 2016 Pearson Education Ltd. 9 -24

Copyright © 2016 Pearson Education Ltd. 9 -25

Copyright © 2016 Pearson Education Ltd. 9 -25

CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTSCLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS
CHAPTER 9 Identifying Market Segments and Targets CopyrightCHAPTER 9 Identifying Market Segments and Targets Copyright
Chapter 9 Identifying Market Segments and Targets CopyrightChapter 9 Identifying Market Segments and Targets Copyright
1 8 Identifying Market Segments and Targets Chapter1 8 Identifying Market Segments and Targets Chapter
9 CHAPTER IDENTIFYING MARKET SEGMENTS AND TARGETS 20039 CHAPTER IDENTIFYING MARKET SEGMENTS AND TARGETS 2003
CHAPTER 8 Identifying Market Segments Targets LEVELS OFCHAPTER 8 Identifying Market Segments Targets LEVELS OF
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