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Market Segmentatio n

Market Segmentation. Market Segmentation and Target Marketing in Today’s Economy Market segmentation is the process by which a market is divided into

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Page 1: Market Segmentation. Market Segmentation and Target Marketing in Today’s Economy  Market segmentation is the process by which a market is divided into

Market Segmentation

Page 2: Market Segmentation. Market Segmentation and Target Marketing in Today’s Economy  Market segmentation is the process by which a market is divided into

Market Segmentation and Target Marketing in Today’s

EconomyMarket segmentation is the process

by which a market is divided into distinct subsets of customers with similar needs and characteristics.

Target marketing requires evaluating the relative attractiveness of various segments.

Page 3: Market Segmentation. Market Segmentation and Target Marketing in Today’s Economy  Market segmentation is the process by which a market is divided into

Brand positioning entails designing product offerings and marketing programs that can establish an enduring competitive advantage in the target market by creating a unique brand image, or position.

These three decision processes are closely linked and have strong interdependence.

Page 4: Market Segmentation. Market Segmentation and Target Marketing in Today’s Economy  Market segmentation is the process by which a market is divided into

Most markets are heterogeneous Markets are complex entities that can

be defined in a variety of ways. Critical issue: Finding an appropriate

segmentation scheme that will facilitate target marketing, positioning, and the formulation of successful marketing strategies and programs.

Page 5: Market Segmentation. Market Segmentation and Target Marketing in Today’s Economy  Market segmentation is the process by which a market is divided into

Target Marketing Target marketing requires marketers to

take three major steps: Identify and profile distinct groups of

buyers who differ in their needs and preferences (market segmentation)

Select one or more market segments to enter (market targeting)

For each target segment, establish and communicate the key distinctive benefit(s) of the company’s market offering. (market positioning)

Page 6: Market Segmentation. Market Segmentation and Target Marketing in Today’s Economy  Market segmentation is the process by which a market is divided into

Levels and Patterns of Market Segmentation

Page 7: Market Segmentation. Market Segmentation and Target Marketing in Today’s Economy  Market segmentation is the process by which a market is divided into

Mass Marketing VS Micro Marketing Mass Marketing is a market coverage

strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer. 

Micro Marketing refers to the designing, creating, and manufacturing products, marketing strategies, and advertising campaigns for the benefit of very specific geographic, demographic, or psychographic segments of the consumer market. It is a relatively new marketing trend created by the diversity of the consumer population and the difficulty in creating a single product that appeals to all the diverse groups in the population. 

Page 8: Market Segmentation. Market Segmentation and Target Marketing in Today’s Economy  Market segmentation is the process by which a market is divided into

SEGMENT MARKETING Market Segment

A marketing technique that targets a group of customers with specific characteristics.

Refers to the aggregating of prospective buyers into groups (segments) that have common needs and will respond similarly to a marketing action. 

Page 9: Market Segmentation. Market Segmentation and Target Marketing in Today’s Economy  Market segmentation is the process by which a market is divided into

SectorThis is a subdivision of a market with distinctive characteristics. Market sectors are usually determined by market segmentation, which divides a market into different categories.

Flexible Market Offering Naked Solution - products and services

that all members of the segment values.

Discretionary Options - products and services that some members of the segment values.  Ex. Ice Cream

Page 10: Market Segmentation. Market Segmentation and Target Marketing in Today’s Economy  Market segmentation is the process by which a market is divided into

NICHE MARKETING Concentrating all marketing efforts on a small

but specific and well defined segment of the population. Niches do not 'exist' but are 'created' by identifying needs, wants, and requirements that are being addressed poorly or not at all by other firms, and developing and delivering goods or services to satisfy them. As a strategy, niche marketing is aimed at being a big fish in a small pond instead of being a small fish in a big pond.

Page 11: Market Segmentation. Market Segmentation and Target Marketing in Today’s Economy  Market segmentation is the process by which a market is divided into

LOCAL MARKETING Local marketing is the customization of

marketing mix variables to thestore level based on consumer, competitor, and store characteristics.

Page 12: Market Segmentation. Market Segmentation and Target Marketing in Today’s Economy  Market segmentation is the process by which a market is divided into

INDIVIDUAL CUSTOMER MARKETING Mass Customization

Mass production of goods with differing individual specifications through the use of components that may be assembled in a number of different configurations. Mass customization is a cost-efficient way of offering some of the benefits of customization.

Page 13: Market Segmentation. Market Segmentation and Target Marketing in Today’s Economy  Market segmentation is the process by which a market is divided into

Customerization the customization of products or services

through personal interaction between a company and the customer.

A company is said to customerize when it is able to dialogue with individual customers and respond by customizing its products, services, and messages on a one-to-one basis. 

Page 14: Market Segmentation. Market Segmentation and Target Marketing in Today’s Economy  Market segmentation is the process by which a market is divided into

Geographic SegmentationWorld Region or CountryCountry RegionProvince / City / MunicipalityCity or Metro SizeNeighborhoodDensityClimate

Page 15: Market Segmentation. Market Segmentation and Target Marketing in Today’s Economy  Market segmentation is the process by which a market is divided into

Demographic Segmentation Age Gender Family size Family life cycle Income Ethnicity Occupation Education Religion Generation Nationality

Page 16: Market Segmentation. Market Segmentation and Target Marketing in Today’s Economy  Market segmentation is the process by which a market is divided into

For women:

“L’Oreal Paris brings its grooming technology and expertise to women……because you’re worth it.”

For men:“Now, L’Oreal Paris brings its grooming technology and expertise to men….because you’re worth it….

Page 17: Market Segmentation. Market Segmentation and Target Marketing in Today’s Economy  Market segmentation is the process by which a market is divided into

Psychographic Segmentation Personality Values Lifestyle Social / Economic Class Interests

Page 18: Market Segmentation. Market Segmentation and Target Marketing in Today’s Economy  Market segmentation is the process by which a market is divided into

Behavioral Segmentation Occasions Benefits User Status User Rates Loyalty Status Readiness Stage Attitude Toward the Product