MARKETING MANAGEMENT 12 th edition 8 Identifying Market

MARKETING MANAGEMENT 12 th edition 8 Identifying Market Segments and Targets Kotler Keller

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. 2

Ford’s Model T Followed a Mass Market Approach 3

Steps in Market Segmentation, Targeting, and Positioning Market Segmentation 1. Identify bases for segmenting the market 2. Develop segment profiles Market Targeting 3. Develop measure of segment attractiveness 4. Select target segments Market positioning 5. Develop positioning for target segments 6. Develop a marketing mix for each segment 4

Four levels of Micromarketing Segments Niches Local areas Individuals 5

Segment Marketing Targeting a group of customers who share a similar set of needs and wants. 6

Figure 8. 1 Basic Market Preference Patterns 7

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. 8

Figure 8. 2 Examples of Market Customization 9

Segmenting Consumer Markets Geographic Demographic Psychographic Behavioral 10

Demographic Segmentation Age and Life Cycle Life Stage Gender Income Generation Social Class 11

Figure 8. 4 The VALS Segmentation System 12

Behavioral Segmentation Decision Roles • Initiator • Influencer • Decider • Buyer • User Behavioral Variables • Occasions • Benefits • User Status • Usage Rate • Buyer-Readiness • Loyalty Status • Attitude 13

Figure 8. 5 Behavioral Segmentation Breakdown 14

Segmenting for Business Markets Demographic Operating Variable Purchasing Approaches Situational Factors Personal Characteristics 15

Effective Segmentation Criteria Measurable • Size, purchasing power, profiles Accessible • Segments can be effectively Substantial • Segments are large or Differential Actionable of segments can be measured. reached and served. profitable enough to serve. • Segments must respond differently to different marketing mix elements & programs. • Effective programs can be designed to attract and serve the segments. 16

Market Targeting Evaluating 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. 17

Market Targeting Market Coverage Strategies Company Marketing Mix Market A. Undifferentiated Marketing Company Marketing Mix 1 Company Marketing Mix 2 Company Marketing Mix 3 Segment 1 Segment 2 Segment 3 B. Differentiated Marketing Segment 1 Company Marketing Mix Segment 2 Segment 3 C. Concentrated Marketing 18

Figure 8. 6 Patterns of Target Market Selection 19

Figure 8. 6 Patterns of Target Market Selection 20

Figure 8. 6 Patterns of Target Market Selection 21