Market Segmentation Jeremy Kees, Ph.D.. Segmentation, Targeting, and Positioning Market Segmentation –Market segment—a group of customers who share a

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  • Market SegmentationJeremy Kees, Ph.D.

  • Segmentation, Targeting, and PositioningMarket SegmentationMarket segmenta group of customers who share a similar set of needs and wantsNOT to be confused with targeting and positioning

  • Our overall intent is toIdentify groups of similar customers and potential customersPrioritize the groupsUnderstand their behaviorRespond with appropriate marketing strategies that satisfy the different preferences of each chosen segment

  • Segmentation, Targeting, and PositioningThe idea is that (typically) we cant be all things to all peopleThere is not one product/service that is ideal for all consumers

    Gladwell Talk.

  • We can segment a market byGeographyDividing the market into different geographical units such asRegion of the world or country City or country size Climate

  • We can segment a market byDemographicsDividing the market based onage gender sexual orientation family size family life cyclehousehold type income/expenditure patterns occupation education socioeconomic status religionnationality/race/ethnic group

  • We can segment a market byPsychographicsDivide market based onPsychological traitspersonality lifestyles valuesattitudes

  • Toms of MaineTargeting a Specific Marketing Segment

    Which segment?

  • Psychographic Segmentation

  • We can segment a market byProduct Characteristics / BehaviorDivide market based on knowledge of, attitude toward, use of, or response to a productbenefit sought product usage ratebrand loyalty product end use readiness-to-buy stage

  • How are these organizations segmenting the market??Oxygen.comKellogg'sMabelleneBudweiser

  • Segmenting based on one variable .

    Claritas Example

  • Ok, weve segmented the market. Now what?

    General Strategy Options (as they relate to target marketing)

    Undifferentiated MarketingDifferentiated MarketingConcentrated MarketingMicromarketing

  • Patterns of Target Market Selection

  • Undifferentiated MarketingIgnore segment differences and go after the whole market with one market offer1 Pricing strategy 1 Promotional program aimed at everybody 1 Type of product with little/no variation 1 Distribution system aimed at entire market What kinds of products can we use this strategy with?

  • Differentiated MarketingOperate in several market segments and design different programs for each segmentP&G

  • Multi-Segment StrategyPerhaps the most effective segmentation strategy

  • Product Differentiation Results InReduced Price SensitivityFewer Direct CompetitorsDrawbacks / Risks / Ethical Issues??Mini CooperNorelco

  • Concentrated MarketingIt allows a firm to specialize because it can focus all energies on satisfying one group's needs A firm with limited resources can compete with larger organizations

    Can you think of when a concentration strategy is appropriate?example

  • MicromarketingMost extreme form of segmentationAlso called one-to-one marketing or mass customizationExamples?

  • Determinants of Targeting StrategyCompany ResourcesProduct HomogeneityStage in PLCCompetition

  • PositioningA marketing strategy that emphasizes serving a specific market segment by achieving a certain position in buyers minds relative to the competitionAttributesPrice/qualityCompetitorsApplicationProduct userProduct class

  • PositioningOftentimes, positioning focuses on Points-of-difference (PODs)The act of designing the companys offering and image to occupy a distinctive place in the minds of the target marketEnergizerDuracell