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Identifying Market

Segments

And Selecting Target

Markets

GROUP MEMBERS: Usman Badar and KainaatRizi

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TAB"E O# $O%TE%TS

Introduction

LEVELS OF SEGMENTATION 

Levels of market segmentation

• Mass Marketing

• Micr&marketing

• Segment Marketing

•  %ic'e Marketing

• "&cal Marketing

• Indiid(al $(st&mer Marketing

Patterns of Market SegmentationMarket Segmentation Procedure

Effective Segmentation

SEGEMENTING ONS!ME" AN# $!SINESS MA"%ET

$ases for Segmenting onsumer Markets

Geogra&'ic Segmentation

#emogra&'ic Segmentation 

Age and "ife)$ycle stage

  "ife Stage

  Gender   Inc&me

Generati&n

  S&cial $lass

Ps(c'ogra&'ic Segmentation

"ifestyle

Pers&nality

*al(es

$e'avioral segmentation

  Occasi&ns

Benefits

User Stat(sUsage rate

"&yalty Stat(s

B(yer)Readiness StageAttit(de

+

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MA"%ET TA"GETING

Evaluating ) Selecting t'e Market Segments• Single)Segment $&ncentrati&n

• Selectie S,ecializati&n

• Pr&d(ct S,ecializati&n

• Market S,ecializati&n

• #(ll Market $&erage

onclusion

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INT"O#!TION

A c&m,any cann&t sere all c(st&mers in a .r&ad market s(c' as c&m,(ters &r s&ft drinks/ T'e c(st&mers

are t&& n(mer&(s and dierse in t'eir .(ying re0(irements/ A c&m,any needs t& identify t'e market

segments it can sere effectiely/ 1ere 2e 2ill e3amine leels &f segmentati&n4 ,atterns &f segmentati&n4

market segment ,r&ced(res4 .ases f&r segmenting c&ns(mer and .(siness markets4 and re0(irements f&r

effectie segmentati&n/ Many c&m,anies are em.racing target marketing/ 1ere sellers disting(is' t'e ma5&r

market segments4 target &ne &r m&re &f t'ese segments4 and deel&, ,r&d(cts and marketing ,r&grams

tail&red t& eac'/ Instead &f scattering/

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LEVELS AN# PATTE"NS OF SEGMENTATION

LEVELS OF MA"%ET SEGMENTATION

Mass Marketing

 T'e seller engages in mass ,r&d(cti&n4 mass distri.(ti&n4 and mass ,r&m&ti&n &f

&ne ,r&d(ct t& all .(yers/ Mass marketing creates t'e largest ,&tential market42'ic' leads t& t'e l&2est c&sts4 2'ic' in t(rn can lead t& l&2er ,rices &r 'ig'er

margins/ %&2 a day t'e e3,l&si&n &f adertising media and distri.(ti&n c'annels

'as made it diffic(lt and increasingly e3,ensie t& reac' a mass a(dience/

Micr&marketing

 Many c&m,anies are t(rning t& micr&marketing t'ese days .y c'&&sing &ne &f t'e

f&(r leels7 segments4 nic'es4 l&cal areas4 and indiid(als/

SEGME%T MARKETI%G

 A market segment c&nsists &f a gr&(, &f c(st&mers 2'& s'are a similar set &f

2ants/ A segment f(rt'er c&ntains a sect&r/ E/g/ A $ar $&m,any mig't say t'at it

2ill target y&(ng4 middle)inc&me car .(yers/ B(t t'e y&(ng4 middle)inc&me car

 .(yers 2ill differ a.&(t t'eir 2ants in a car7 l&2 c&st &r e3,ensie car/ S&4 t'e

y&(ng4 middle)inc&me car .(yer is a sect&r/Segment marketing &ffers seeral .enefits &er mass marketing4 s&me &f t'em are:!/ T'e c&m,any can create a m&re fine)t(ned ,r&d(ct &r serice &ffering and

 ,rice it a,,r&,riately f&r t'e target segment/

+/ T'e c&m,any can m&re easily select t'e .est distri.(ti&n and c&mm(nicati&ns

c'annels/

-/ T'e c&m,any can als& 'ae a clearer ,ict(re &f its c&m,etit&rs/

 %I$1E MARKETI%G

 A nic'e is am&re narr&2ly defined gr&(, seeking a distinctie mi3 &f .enefits/

Marketers (s(ally identify nic'es .y diiding a segment int& s(. segments/

An attractie nic'e 'as t'e f&ll&2ing c'aracteristics:!/ T'e c(st&mers in t'e nic'e 'ae a distinct set &f needs/+/ T'ey 2ill een ,ay a ,remi(m t& t'e firm t'at .est satisfies t'eir needs/

-/ T'e nic'e is n&t likely t& attract &t'er c&m,etit&rs/

6/ T'e nic'er gains certain ec&n&mies t'r&(g' s,ecializati&n/

8/ T'e nic'e 'as size4 ,r&fit and gr&2t' ,&tential/

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"O$A" MARKETI%G

Target marketing is leading t& marketing ,r&grams tail&red t& t'e needs and 2ants

&f l&cal c(st&mer gr&(,s 9trading areas4 neig'.&r'&&ds4 een indiid(al st&res

I%;I*I;UA" $USTOMER MARKETI%G 

T'e (ltimate leel &f segmentati&n leads t& s

re0(irements/

E/g/ Englis' B&&t 1&(se 'as .een in .(siness since !?6@/ T'ey la(nc'ed t'eir internet .(siness in +!/

Initially &rders 2ere m&stly .ased fr&m and Middle East/ 1&2eer in ++4 since acce,tance &f credit

cards f&r delieries 2it'in t'r&(g' Gerry>s Pakistani s'&,/c&m4 internal .(siness 'as .een ery ,r&mising/

Pe&,le 2'& 'ae (sed EB1 s'&es and are n&2 liing a.r&ad still l&e t& .(y EB1

 222/e.'s'&,/c&m &ffers &ne &f t'e .est c&llecti&ns &f s'&es y&(>ll eer see/ 222/e.'s'&,/c&m  .&asts

&er 8@ years &f s'ared s'&e ind(stry e3,erience 2it' its f&(nders4 leading c&ns(mer)drien f&&t2ear

c&m,any in t'e c&(ntry4 and t'e leader in tec'nically adanced c&mf&rt f&&t2ear/

T'ey say t een t'ink t2ice a.&(t it4 &(r sizing g(ide and #it Assistant 2ill ens(re 5(st t'e rig't fit and4 2it' &(r

-)day Ret(rn P&licy c(st&mers may ret(rn (n2&rn s'&es f&r any reas&n4 n& 0(esti&ns asked/ It>s t'at

sim,le/

e.'s'&,/c&mDt'e .rands y&( kn&2 and t'e styles y&( l&e=/

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$'&ice.&ard

 Online c&m,anies t&day are &ffering c(st&mers a 'oice*oard4 2'ic' is an

interactie &nline system t'at all&2s indiid(al c(st&mers t& design t'eir &2n

serices and ,r&d(cts .y c'&&sing fr&m a men( &f attri.(tes4 c&m,&nents4 ,rices4and deliery &,ti&ns/

S&me &f t'e adantages &f $'&ice.&ard are:

!/ T'e $'&ice.&ard facilitates (, selling4 cr&ss)selling4 and4 and re,eat .(siness .y

&,ening c(st&mer>s eyes t& f(rt'er ,&ssi.ilities and .y satisfying t'eir

 ,references/

+/ T'e $'&ice.&ard ,r&ides real)time market researc' and insig't int& c(st&mer>sc(rrent ,references/

-/ T'e $'&ice.&ard red(ces c&sts f&r man(fact(rers and s(,,liers .y a&iding t'e

 ,r&d(cti&n &f (n2anted g&&ds and disc&(nting t& get rid &f t'em/

E/g/ I$I ;(l(3 Pakistan ,r&ides t'e c'&ice.&ard t& its &nline c(st&mers &n

d(l(3/c&m/ T'ey ,r&ide y&( 2it' t'e c&l&r sc'emes &f ,aints7 y&( can c'&&se t'e

kind &f s(rface y&( 2ant t& ,aint and t'ey s'&2 y&( t'e aaila.le list &f ,aintty,es and c&l&rs/ ;(l(3/c&m ,r&ides y&( a facility4 s& t'at y&( d&n>t need t& isitt'eir &(tlets f&r inf&rmati&n4 y&( can sim,ly l&g &n t& 222/d(l(3/c&m

Similarly 222/marri&tt/c&m facilitates y&( t& make reserati&ns4 searc' f&r any

&t'er '&tel etc/

 

$(st&merizati&n

 It c&m.ines &,erati&nally drien mass c(st&mizati&n 2it' c(st&mized marketing

in a 2ay t'at em,&2ers c&ns(mers t& design t'e ,r&d(ct &r serice &ffering &f

t'eir c'&ice/ T'e firm n& l&nger re0(ires ,ri&r inf&rmati&n a.&(t t'e c(st&mer4 n&r

d&es t'e firm need t& &2n man(fact(ring/ T'e firm ,r&ides a ,latf&rm and t&&lsand rents &(t t& c(st&mers t'e means t& design t'eir &2n ,r&d(cts/ Eac' .(siness(nit 2ill 'ae t& decide 2'et'er it 2&(ld gain m&re .y designing its .(siness

system t& create &fferings f&r segments &r f&r indiid(als/ $&m,anies t'at fa&r

segmentati&n see it as m&re efficient4 re0(iring less c(st&mer inf&rmati&n4 and

 ,ermitting m&re standardizati&n &f market &fferings/ T'&se 2'& fa&r indiid(al

marketing claim t'at segments are a ficti&n4 t'at indiid(als 2it'in s&)called

segments differ greatly and t'at marketer can ac'iee m(c' m&re ,recisi&n and

effectieness .y addressing indiid(al needs/

PATTE"NS OF MA"%ET SEGMENTATION

Market segments can .e .(ild (, in many 2ays4 &ne 2ay is t& identify &referencesegments/ #&r e3am,le c&&kies .(yers are asked '&2 m(c' t'ey al(e s2eetness

and saltiness in .isc(its as t2& ,r&d(ct attri.(tes/ T'ree different ,atterns can

emerge/

!/ +omogeneous Preferences, s'&2s a market 2'ere all t'e c&ns(mers'ae r&(g'ly t'e same ,references/ T'e market s'&2s n& nat(ral segments/ e 2&(ld

 ,redict t'at e3isting .rands 2&(ld .e similar and cl(ster ar&(nd t'e middle &f t'e scale in

 .&t' s2eetness F saltiness/

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+/ #iffused Preferences, At t'e &t'er e3treme4 c&ns(mer ,referencesmay.e scattered t'r&(g'&(t t'e s,ace4 indicating t'at c(st&mers ary greatly in t'eir

 ,references/ T'e first .rand t& enter t'e market is likely t& ,&siti&n in t'e center t& a,,eal

t& t'e m&st ,e&,le

-/ lustered Preferences, T'e market mig't reeal distinct ,referencecl(sters4 called natural market segments/ T'e first firm in t'is market'as t'ree &,ti&ns/ It mig't ,&siti&n in t'e center4 '&,ing t& a,,eal t& all

gr&(,s/ It mig't ,&siti&n in t'e largest market segment -concentrated

marketing./ It mig't deel&, seeral .rands4 eac' ,&siti&ned in a

different segment/ If t'e first firm deel&,ed &nly &ne .rand4 c&m,etit&rs

2&(ld enter and intr&d(ce .rands in t'e &t'er segments/

 

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  MA"%ET SEGMENTATION P"EE#!"E

1&2 can 2e identify market segmentsH One a,,r&ac' 2&(ld .e t& classify

c&ns(mers dem&gra,'ically/ A .ank4 f&r e3am,le4 may decide t& gr&(, its

c(st&mers .y 2ealt'4 ann(al inc&me4 and age/ S(,,&se it disting(is'es fie 2ealt'

classes4 seen inc&me classes4 and si3 age classes/ T'is al&ne 2&(ld create +!

market segments 98 @/ B(t c&ns(mers in any &ne gr&(, d& n&t really 'aesame needs4 attit(des and ,references/R&ger Best ,r&,&sed t'e seen)ste, a,,r&ac' t& ad&cate t'e needs0*ased

segmentation a&&roac'

#escri&tion

!/ %eeds)Based Segmentati&n Gr&(, c(st&mers int& segments .ased &n

similar needs and .enefits s&(g't .y

c(st&mer in s&ling a ,artic(lar c&ns(m,ti&n

 ,r&.lem/

+/ Segment Identificati&n #&r eac' needs).ased segment4 determine

2'ic' dem&gra,'ics4 lifestyles4 and (sage

 .e'ai&rs make t'e segment distinct andidentifia.le 9acti&na.le/

-/ Segment Attractieness Using ,redetermined segment attractieness

criteria 9s(c' market gr&2t'4 c&m,etitie

intensity4 and market access4 determine t'e&erall attractieness &f eac' segment/

6/ Segment Pr&fita.ility ;etermine segment ,r&fita.ility/

8/ Segment ,&siti&ning #&r eac' segment7 create a s ,&siti&ning

strategy/

@/ Marketing)mi3 strategy E3,and segment ,&siti&ning strategy t&

incl(de all as,ects &f t'e marketing mi3:

 ,r&d(ct4 ,rice4 ,r&m&ti&n and ,lace/

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EFFETIVE SEGMENTATION

 %&t all segmentati&n is (sef(l/ #&r e3am,le4 ta.le salt .(yers c&(ld .e diidedint& .l&nd and .r(nette c(st&mers4 .(t 'air c&l&r is n&t releant t& t'e

 ,(rc'ase &f salt/ #(rt'erm&re4 if all salt .(yers .(y t'e same am&(nt &f salt

eac' m&nt'4 .eliee all salt is t'e same4 and 2&(ld ,ay &nly &ne ,rice f&r salt4

t'is market 2&(ld .e minimally segmenta.le fr&m a marketing ,&int &f ie2/T& .e (sef(l4 market segment m(st .e:

• Measura*le, T'e size4 ,(rc'asing ,&2er4 and c'aracteristics &f t'e

segment can .e meas(red/

• Su*stantial, T'e segments are large and ,r&fita.le en&(g' t& sere/

A segment s'&(ld .e t'e largest ,&ssi.le '&m&gene&(s gr&(, 2&rt'

g&ing after 2it' a tail&red marketing ,r&gram/ It 2&(ld n&t ,ay4 f&r

e3am,le4 f&r an a(t&m&.ile man(fact(rer t& deel&, cars f&r ,e&,le

2'& are (nder f&(r feet tall/

• Accessi*le, T'e segments can .e effectiely reac'ed and sered/

• #ifferentia*le, T'e segments are c&nce,t(ally disting(is'a.le and

res,&nd differently t& different marketing)mi3 elements and ,r&grams/If married and (nmarried 2&men res,&nd similarly t& a sale &n

 ,erf(me4 t'ey d& n&t c&nstit(te se,arate segments/

• Actiona*le, Effectie ,r&grams can .e f&rm(lated f&r attracting and

sering t'e segments/

SEGMENTING ONS!ME" AN# $!SINESS MA"%ETS

T'e ma5&r segmentati&n aria.les J ge&gra,'ic4 dem&gra,'ic4 ,syc'&gra,'ic4 and .e'ai&ral

segmentati&n/

GEOG"AP+I SEGMENTATION

Ge&gra,'ic segmentati&n calls f&r diiding t'e market int& different ge&gra,'ical (nits s(c' as nati&n4

 states4 regi&ns4 c&(ntries4 cities4 &r neig'.&r'&&ds / T'e c&m,any can &,erate in &ne &r a fe2

ge&gra,'ic areas4 &r &,erate in all .(t ,ay attenti&n t& l&cal ariati&ns / #&r e3am,le 1ilt&n 1&tels

c(st&mizes r&&ms and l&..ies acc&rding t& t'e l&cati&n &f its '&tels/

#EMOG"AP+I SEGMENTATION

In dem&gra,'ic segmentati&n 4 t'e market is diided int& gr&(,s &n t'e .asis &f aria.les s(c' as age 4

family life cycle 4 gender 4 inc&me 4 &cc(,ati&n 4 ed(cati&n 4 religi&n 4 race 4 generati&n 4 nati&nality 4 and

s&cial class/ ;em&gra,'ic aria.les are t'e m&st ,&,(lar .ases f&r disting(is'ing c(st&mer gr&(,s/ Onereas&n is t'at c&ns(mer 2ants4 ,references4 and (sage rates are &ften ass&ciated 2it' dem&gra,'ic

aria.les/ An&t'er is t'at dem&gra,'ic aria.les are easier t& meas(re/

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Age and "ife)$ycle Stage

$&ns(mer 2ants and a.ilities c'ange 2it' age/ Age and life cycle can .e tricky aria.les/ #&r e3am,le4 t'e

#&rd M&t&r $&m,any designed its M(stang a(t&m&.ile t& a,,eal t& y&(ng ,e&,le 2'& 2anted an

ine3,ensie s,&rts car / B(t #&rd f&(nd t'at many m(stangs 2ere ,(rc'ased .y &lder .(yers/ It t'en

realized t'at its target market 2as n&t t'e c'r&n&l&gically y&(ng .(t t'e ,syc'&l&gically y&(ng/

"ife Stage

Pers&n in t'e same ,art &f t'e life cycle may differ in t'eir life stage/ "ife stage defines a ,ers&n>s ma5&r

c&ncern4 s(c' as g&ing t'r&(g' a di&rce4 g&ing int& a sec&nd marriage4 taking care &f &lder ,arents4

deciding t& c&'a.it 2it' an&t'er ,ers&n4 deciding t& .(y a ne2 '&me4 and s& &n/

Gender 

Men and 2&men tend t& 'ae different attit(dinal and .e'ai&ral &rientati&ns4 .ased ,artly &n genetic

make(, and ,artly &n s&cializati&n ,ractices/Gender differentiati&n 'as l&ng .een a,,lied in cl&t'ing4 'airstyling4 c&smetics and magazines/ T'e

a(t&m&.iles ind(stry is .eginning t& rec&gnize gender segmentati&n4 since t'ere are n&2 m&re 2&men car

&2ners4 s&me man(fact(rers are designing feat(res t& a,,eal t& 2&men4 alt'&(g' t'ey st&, s'&rt &f

adertising t'e cars as 2&men>s cars/

Inc&me

Inc&me segmentati&n is l&ng) standing ,ractice in s(c' ,r&d(cts and serices categ&ries as a(t&m&.iles4

 .&ats4 cl&t'ing4 c&smetics4 and trael/ 1&2eer4 inc&me d&es n&t al2ays ,redict t'e .est c(st&mers f&r a

gien ,r&d(ct/

Generati&n

Many researc'ers are n&2 t(rning t& generati&n segmentati&n/ Eac' generati&n is ,r&f&(ndly infl(enced .y

t'e times in 2'ic' it gr&2s (,) t'e m(sic4 m&ies4 ,&litics4 and defining eents &f t'at ,eri&d/

;em&gra,'ers call t'ese gr&(,s

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"ifestyle

Pe&,le e3'i.it many m&re lifestyles t'an are s(ggested .y t'e seen s&cial classes/ Pe&,le differ in

attit(des4 interest4 actiities4 and t'ese affect t'e g&&ds and serices t'ey c&ns(me/ $&m,anies making

c&smetics and f(rnit(re are al2ays seeking &,,&rt(nities in lifestyles segmentati&n4 .(t lifestyle

segmentati&n d&es n&t al2ays 2&rk/

Pers&nality

Markers 'ae (sed ,ers&nality aria.les t& segment markets/ T'ey end&2 t'eir ,r&d(cts 2it' a s c'&ices and desires &er t'e l&ng term/

$E+AVIO"AL SEGMENTATION

In .e'ai&ral segmentati&n4 .(yers are diided int& gr&(,s &n t'e .asis &f t'eir kn&2ledge &f4 attit(det&2ard4 (se &f4 &r res,&nse t& a ,r&d(ct/ Many marketers .eliee t'at .e'ai&ral aria.les)&ccasi&ns4

 .enefits4 (ser stat(s4 (sage rate4 l&yalty stat(s4 .(yer)readiness stage4 and attit(deDare t'e .est starting

 ,&ints f&r c&nstr(cting market segments/

Occasi&ns

B(yers can .e disting(is'ed acc&rding t& t'e &ccasi&ns 2'en t'ey deel&, a need4 ,(rc'ase a ,r&d(ct4 &r

(se a ,r&d(ct/ Occasi&ns segmentati&n can 'el, firms e3,and ,r&d(ct (sage/ #&r e3am,le in Pakistan tea is(s(ally c&ns(med at .reakfast/ A c&m,any can c&nsider &ccasi&ns &f critical life eents &r transiti&ns)

marriage4 c'ild.irt'4 illness4 rel&cati&n4 career c'angeDas giing rise t& ne2 needs/

Benefits

B(yers can .e classified acc&rding t& t'e .enefits t'ey seek4 ,e&,le ary c&nsidera.ly in t'e .enefits t'ey

seek fr&m t'e same ,r&d(ct/

!/ "oad 2arriors, ,remi(m ,r&d(cts and 0(ality serice/ 9!C

+/ Generation F, fast f(el4 fast serice4 and fast f&&d/ 9+@C-/ True $lues, .randed ,r&d(cts and relia.le serice/ 9!C6/ +ome *odies, c&nenience/ 9+!C

8/ Price S'o&&ers, "&2 ,rice/ 9+C

User Stat(s

!+

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Markets can .e segmented int& n&n(ser4 e3)(sers4 ,&tential (sers4 first time (sers4 and reg(lar (sers &f a

 ,r&d(ct/ Market)s'are leaders tend t& f&c(s &n attracting ,&tential (sers .eca(se t'ey 'ae t'e m&st t& gain/

Smaller firms f&c(s &n trying t& attract c(rrent (sers a2ay fr&m t'e market leader/

Usage Rate

Markets can .e segmented int& lig't4 medi(m4 and 'eay ,r&d(ct (sers/ 1eay (sers are &ften a small

 ,ercentage &f t'e market .(t acc&(nt f&r 'ig' ,ercentage &f t&tal c&ns(m,ti&n/

"&yalty Stat(s

$&ns(mers 'ae arying degrees &f l&yalty t& s,ecific .rands4 st&res4 and c&m,anies/ B(yers can .e

diided int& f&(r gr&(,s acc&rding t& .rand l&yalty stat(s:

!/ +ard0core lo(als, $&ns(mers 2'& are .(y &ne .rand all t'e time/+/ S&lit lo(als, $&ns(mers 2'& are l&yal t& t2& &r t'ree .rands/-/ S'ifting lo(als, $&ns(mers 2'& s'ift fr&m &ne .rand t& an&t'er/

6/ S3itc'ers, $&ns(mers 2'& s'&2 n& l&yalty t& any .rand/

  B(yer)readiness stage

A market c&nsists &f ,e&,le in different stages &f readiness t& .(y a ,r&d(ct/ S&me are (na2are &f t'e

 ,r&d(ct4 s&me are a2are4 s&me are inf&rmed4 s&me are interested4 s&me desire t'e ,r&d(ct4 and s&meintend t& .(y/ T'e relatie n(m.ers make a .ig difference in designing t'e marketing ,r&gram/

  Attit(de

#ie attit(de gr&(,s can .e f&(nd in a market: ent'(siastic4 ,&sitie4 indifferent4 negatie4 and '&stile/;&&r)t&)d&&r 2&rkers in ,&litical cam,aign (se t'e &ter>s attit(de t& determine '&2 m(c' time t&

s,end 2it' t'at &ter/ T'ey t'ank t& ent'(siastic &ters and remind t'em t& &te7 t'ey reinf&rce t'&se

2'& are ,&sitiely dis,&sed7 t'ey try t& 2in t'e &tes &f indifferent &ters7 t'ey s,end n& time trying t&

c'ange t'e attit(des &f negatie and '&stile &ters/

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 Segmentation Varia*les #ata

Geogra&'ic

&rld regi&n Asia

$&(ntry Pakistan

$ities All ma5&r cities &f Pakistan

;ensity Ur.an

$limate 1&t and ;ry

#emogra&'ic

Age All ages

Gender Male4 #emale

#amily size !)+4 -)64 8

#amily life cycle L&(ng4 Single7 L&(ng4 Married4 n& c'ildren7 L&(ng4 Married 2it'

c'ildren7 Older4 Married 2it' c'ildren7 Older4 Married 2it' n& c'ildren

(nder !7 Older4 Single7 Ot'er

Inc&me Rs/-4

Occ(,ati&n #r&m middle class t& (,,er class

Ed(cati&n Sc'&&ls4 $&lleges4 Uniersities

Religi&n Ma5&r religi&n &f Islam4 $'ristianity and 1ind(ism and small

 ,ercentage &f &t'ers

Race Asian

 %ati&nality Pakistani

Ps(c'ogra&'ic

S&cial class &rking class4 Middle class4 U,,er class/

"ifestyle Act(alizes4 #(lfilled4 Belieers4 Ac'ieers4 Striers4 E3,erience>s

makers and Str(gglers

$e'avioral

Occasi&ns Parties4 Birt'days4 S,&rts and Reg(lar Occasi&ns

Benefits (ality4 Taste4 Ec&n&my4 1ealt'

User stat(s #irst time (ser  

Attit(de t&2ards ,r&d(ct P&sitie

 

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MA"%ET TA"GETING

Once t'e firm 'as identified its market)segment &,,&rt(nities4 it 'as t& decide '&2 many and 2'ic'&ne t& target/

Eal(ating and selecting t'e market segments

In eal(ating different market segments4 t'e firm m(st l&&k at t2& fact&rs: t'e segment>s &erall

attractieness and t'e c&m,any>s &.5ectie and res&(rces/ 1aing eal(ated different segments4

c&m,any can c&nsider fie ,atterns &f target market selecti&n/

Single)segment c&ncentrati&n

S(z(ki c&ncentrates &n t'e small)call market and 1&nda &n t'e family car market/ T'r&(g'

c&ncentrated marketing4 t'e firm gains a str&ng kn&2ledge &f t'e segment>s needs and ac'iees a

str&ng market ,resence/ #(rt'erm&re4 t'e firm en5&ys &,erating ec&n&mies t'r&(g' s,ecializing its

 ,r&d(cti&n4 distri.(ti&n4 and ,r&m&ti&n/ If it ca,t(res segment leaders'i,4 t'e firm can earn a 'ig'ret(rn &n its inestment/

Selectie s,ecializati&n

T'e firm selects a n(m.er &f segments4 eac' &.5ectiely attractie and a,,r&,riate/ T'ere may .e little&r n& synergy am&ng t'e segments4 .(t eac' ,r&mises t& .e a m&neymaker/ T'is m(ltisegment

strategy 'as t'e adantage &f diersifying t'e firm>s risk/

Pr&d(ct s,ecializati&n

T'e firm makes a certain ,r&d(ct t'at it sells t& seeral segments/ An e3am,le 2&(ld .e a micr&sc&,eman(fact(rer 2'& sells t& (niersity4 g&ernment4 and c&mmercial la.&rat&ries/ T'e firm makesdifferent micr&sc&,es f&r t'e different c(st&mer gr&(,s and .(ilds a str&ng re,(tati&n in t'e s,ecific

 ,r&d(ct area/ T'e d&2nside risk is t'at t'e ,r&d(ct may .e s(,,lanted .y an entirely ne2 tec'n&l&gy/

Market s,ecializati&n

T'e firm c&ncentrates &n sering many needs &f a ,artic(lar c(st&mer gr&(,/ An e3am,le 2&(ld .e a

firm t'at sells an ass&rtment &f ,r&d(cts &nly t& (niersity la.&rat&ries/ T'e firm gains a str&ngre,(tati&n in sering t'is c(st&mer gr&(, and .ec&mes a c'annel f&r additi&nal ,r&d(cts t'e c(st&mer

gr&(, can (se/ T'e d&2nside risk is t'at t'e c(st&mer gr&(, may s(ffer .(dget c(ts/

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#(ll market c&erage

T'e firm attem,ts t& sere all c(st&mer gr&(,s 2it' all t'e ,r&d(cts t'ey mig't need/ Only ery largefirms s(c' as IBM 9c&m,(ter market4 General M&t&rs 9e'icle market4 and c&ca)c&la 9drink market

can (ndertake a f(ll market c&erage strategy/ "arge firms can c&er a 2'&le market in t2& .r&ad

2ays: t'r&(g' undifferentiated marketing &r differentiated marketing/

 In (ndifferentiated marketing4 t'e firm ign&res segment differences and g&es after t'e 2'&le market2it' &ne &ffer/

;ifferentiated marketing ty,ically creates m&re t&tal sales t'an (ndifferentiated marketing/ 1&2eer4

is als& increases t'e c&st &f d&ing .(siness/ T'e f&ll&2ing c&sts are likely t& .e 'ig'er:

!/ Product modification costs: M&dificati&n a ,r&d(ct t& meet different market)segmentre0(irements (s(ally in&les RF;4 engineering 4 and s,ecial t&&ling c&sts/

+/ Manufacturing costs: it is (s(ally m&re e3,ensie t& ,r&d(ce ! (nits &f ! different ,r&d(ctst'an ! (nits &f &ne ,r&d(ct/ T'e l&nger t'e ,r&d(cti&n set(, time and t'e smaller t'e sales

&l(me eac' ,r&d(ct4 t'e m&re e3,ensie t'e ,r&d(ct .ec&mes/ 1&2eer4 if eac' m&del is s&ld in

s(fficiently large &l(me4 t'e 'ig'er set(, c&sts may .e 0(ite small ,er (nit/

-/ Administrative costs: T'e c&m,any 'as deel&, se,arate marketing ,lans f&r eac' marketsegment/ T'is re0(ires e3tra marketing researc'4 f&recasting4 sales analysis4 ,r&m&ti&n4 ,lanning4

and c'annel management/

6/ Inventor( costs, it is m&re c&stly t& manage inent&ries c&ntaining many ,r&d(cts/8/ Promotion costs, T'e c&m,any 'as t& reac' different market segments 2it' different ,r&m&ti&n

 ,r&grams/ T'e res(lt is increased ,r&m&ti&n),lanning c&st and media c&sts/Beca(se differentiated marketing leads t& .&t' 'ig'er sales and 'ig'er c&sts/

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ONL!SION

T'e t&&ls f&r identifying market segments and selecting target markets all &er t'e 2&rld is same and t'ese

t&&ls are als& im,lemented in Pakistan/ $&m,anies make different segments f&r t'eir &2n c&nenience and

target &nly t'&se markets t'at in ret(rn gies t'e c&m,any m&st ,r&fit and t'at c&m,any can easily sere/Identifying market segments and selecting target markets ena.le t'e c&m,any t& sere t'eir c(st&mer in a

 .etter 2ay/ it' marketers increasingly ad&,ting m&re and m&re refined market segmentati&n sc'emesD 

f(eled .y internet and &t'er c(st&mizati&n eff&rtsDs&me critics claim t'at massmarketing is dead /

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"EFE"ENE LIST

Marketing management 4 eleent' editi&n .y P'ili, K&tler 

• 222/e.'s'&,/c&m

• 222/marri&t/c&m

• 222/d(l(3/c&m

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