Phillip Kevin Lane Kotler Keller Marketing Management 14

Phillip Kevin Lane Kotler • Keller Marketing Management • 14 e

PPNS SUCCESS Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 2 of 26

PPNS Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 3 of 26

t p a h C 8 r e Identifying Market Segments and Targets

Target Marketing Requirements 1. Identify and profile distinct groups of buyers (market segmentation). 2. Select one or more market segments to enter (market targeting). 3. For each, establish and communicate benefits of offering (market positioning). Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 5 of 26

Bases for Segmenting Consumers Geographic Demographic Psychographic Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Behavioral Slide 6 of 26

Geographic Segmentation Geoclustering Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 7 of 26

Demographic Segmentation Age and Life-cycle Stage Life Stage Gender Income Generation Race and Culture Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 8 of 26

Age and Life-Cycle Stage Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 9 of 26

Life Stage Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 10 of 26

Gender Women: Influence 80% of consumer purchases Make 75% of new home decisions Purchase 60% of cars Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 11 of 26

Income Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 12 of 26

Generation Gen X (1964 -1978) Baby Boomers (1946 -1964) Silent Generation (1925 -1945) Millennials (Gen Y) – (1979 -1994) -78 Million people -$187 annual spending power Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 13 of 26

U. S. Generation Cohorts Cohort Size Defining Features Millennials 78 m Raised in affluence, tech savvy, perceived immunity from marketing Gen X 50 m Parents relied on day care, accepts diversity, pragmatic and individualistic Baby Boomers Control 3/4 th of the wealth in the U. S, 76 m seek fountain of youth (hair color, hair replacement), home exercise equipment (1979 -1994) (1964 -1978) (1946 -1964) Silent Generation 42 m Lead vibrant lives, spend money and (1925 -1945) time on grandchildren. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 14 of 26

Race and Culture Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 15 of 26

Multicultural Market Profile Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 16 of 26

Psychographic Segmentation • Personality traits • Lifestyle • Values Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 17 of 26

e r u g Fi 1. 8 VALS Segmentation System Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 18 of 26

Behavioral Segmentation Usage occasions Initiator User status User Influencer Usage rate Buyer-readiness Buyer Decider Decision Roles Loyalty status User and Usage Needs and Benefits Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 19 of 26

e r u g Fi 2. 8 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Brand Funnel Slide 20 of 26

Consumer Attitudes Enthusiastic Positive Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Indifferent Negative Hostile Slide 21 of 26

e r u g Fi 3. 8 Behavioral Segmentation Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 22 of 26

Bases for Segmenting B 2 B Markets Demographic Industry, company size, location Operating Variables Technology, user status, customer capabilities Purchasing Approach Power structure, nature of existing relationship Situational Factors Urgency, specific application, size of order Personal Characteristics Buyer-seller similarity, loyalty, risk attitude Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 23 of 26

Market Targeting Effective Segmentation Criteria Measurable Substantial Accessible Differentiable Actionable Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 24 of 26

Market Targeting orter’s Five Force Substitute Products Buyer Power Supplier Power New Entrants Rivals Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 25 of 26

Porter’s Five Force Porter's Five Forces Analysis is an important tool for assessing the potential for profitability in an industry. With a little adaptation, it is also useful as a way of assessing the balance of power in more general situations. Supplier Power: The power of suppliers to drive up the prices of your inputs. Buyer Power: The power of your customers to drive down your prices. Competitive Rivalry: The strength of competition in the industry. The Threat of Substitution: The extent to which different products and services can be used in place of your own. The Threat of New Entry: The ease with which new competitors can enter the market if they see that you are making good profits (and then drive your prices down). Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 26 of 26

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 27 of 26

threat of new entry is quite high: if anyone looks as if they're making a sustained profit, new competitors can come into the industry easily, reducing profits. Competitive rivalry is extremely high: if someone raises prices, they'll be quickly undercut. Intense competition puts strong downward pressure on prices. Buyer Power is strong, again implying strong downward pressure on prices. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall There is some threat of substitution. Slide 28 of 26

Evaluating and Selecting Segments Multiple segment specialization Full market coverage Single-segment concentration Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Individual marketing Slide 29 of 26

e r u g Fi 4. 8 Levels of Segmentation Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 30 of 26

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 31 of 26

Discussion Questions 1. What are the different levels of market segmentation? 2. In what ways can a company divide a market into segments? 3. What are the requirements for effective segmentation? 4. How should business markets be segmented? 5. How should a company choose the most attractive target markets? Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 32 of 26