Marketing Management (MKT 511) Delivered by: Dr. Shilpa Iyanna · In behavioral segmentation, marketers divide buyers into groups on the basis of their knowledge of, attitude towards,

Marketing Management (MKT 511)

Delivered by: Dr. Shilpa Iyanna

8

Identifying Market

Segments and Targets

1

Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 8-3

Chapter Questions

What are the different levels of market

segmentation?

How can a company divide a market into

segments?

What are the requirements for effective

segmentation?

How should business markets be segmented?

How should a company choose the most

attractive target markets?


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


What is a Market Segment?

A market segment consists of a group

of customers who share a similar set of

needs and wants.


Segmenting Consumer Markets

Geographic

Demographic

Psychographic

Behavioral

Geographic Segmentation


Markets are divided into

geographical units such

as nations, states,

regions, counties, cities,

or neighborhoods. The

company can operate in

one, few, or all areas but

pay attention to local

variations.

http://www.huffingtonpost.com/2012/09/04/vegetaria

n-meat-free-mcdonalds-fast-food-chain-india_n_1855300.html

http://www.aboutmcdonalds.com/country/map.html

http://www.huffingtonpost.com/2012/09/04/vegetarian-meat-free-mcdonalds-fast-food-chain-india_n_1855300.html


















http://www.aboutmcdonalds.com/country/map.html


Claritas’ Prizm http://www.claritas.com/MyBestSegments/Default.jsp?ID=30&menuOption=segmentexplorer&pageName=Segment%2

BExplorer&id1=1027

Some approaches combine geographic data with

demographic data to yield even richer

descriptions of consumers and neighborhoods.

The groupings take into consideration 39 factors

in five broad categories:

Education and affluence

Family life cycle

Urbanization

Race and ethnicity

Mobility

http://www.claritas.com/MyBestSegments/Default.jsp?ID=30&menuOption=segmentexplorer&pageName=Segment%2BExplorer&id1=1027

http://www.claritas.com/MyBestSegments/Default.jsp?ID=30&menuOption=segmentexplorer&pageName=Segment%2BExplorer&id1=1027


Demographic Segmentation

Demographic variables are popular because they’re

often associated with consumer needs and wants;

easy to measure; and helps estimate the size of the

market .

Age and life cycle

Life stage

Gender

Income

Generation

Social class

Race and Culture

Age and Lifecycle Stage


Gender and Income


Generational Influences


Each generation or cohort

is profoundly influenced by

the times in which it grows

up—the music, movies,

politics, and defining events

of that period.

Race and Culture


http://www.godubai.c

om/dining/

http://www.godubai.com/dining/

http://www.godubai.com/dining/

Psychographic Segmentation

and The VALS Framework


In psychographic

segmentation, buyers

are divided into different

groups on the basis of

psychological/

personality traits,

lifestyle, or values http://www.strategicbusinessinsights.com

/vals/presurvey.shtml

http://www.scribd.com/doc/13138719/Por

sche-Psychological-Segmentation

http://www.strategicbusinessinsights.com/vals/presurvey.shtml

http://www.strategicbusinessinsights.com/vals/presurvey.shtml

http://www.scribd.com/doc/13138719/Porsche-Psychological-Segmentation






Behavioral Segmentation Based

on Needs and Benefits


In behavioral segmentation, marketers divide

buyers into groups on the basis of their

knowledge of, attitude towards, use of, or

response to a product.

Not everyone who buys a product has the same

needs or wants the same benefits. Needs-based or

benefits-based segmentation identifies distinct

marketing segments with clear marketing

segmentations. http://www.colgate.com/app/CP/US/EN/OC/Products/Toothpastes.cvsp

http://www.colgate.com/app/CP/US/EN/OC/Products/Toothpastes.cvsp










Behavioral Segmentation:

Decision Roles

Initiator

Influencer

Decider

Buyer

User

Behavioral Segmentation:

Behavioral Variables (User and

Usage)

Occasions

Benefits

User Status

Usage Rate

Buyer-Readiness

Loyalty Status

Attitude


Figure 8.2 Example of a Brand Funnel

(buyer-readiness stage)



Loyalty Status

Hard-core

Split loyals

Shifting loyals

Switchers

Figure 8.3 Behavioral

Segmentation Breakdown



Segmenting for Business Markets

Demographic (industry; company size; geographic

area)

Operating variable (technology; user status; etc.)

Purchasing approaches (Purchasing-function

organization; power structure; purchasing policies etc.)

Situational factors (Urgency; size of orders etc.)

Personal characteristics (buyer-seller similarities;

attitude towards risk etc.)


Steps in Segmentation Process

Need-based segmentation

Segment identification

Segment attractiveness

Segment profitability

Segment positioning

Segment acid test

Market mix strategy


Effective Segmentation Criteria

Measurable (e.g. size; purchasing power)

Substantial (large and profitable)

Accessible (easy to reach and serve)

Differentiable (segments should respond differently

to marketing mix)

Actionable (formulate programs to attract and serve)

Porter’s 5 Forces Model – Measure

Attractiveness of segments


Threat of Rivalry

Threat of Supplier

Bargaining Power

Threat of Buyer

Bargaining Power

Threat of

New Entrants

Threat of

Substitutes

Figure 8.4 Possible Levels

of Segmentation


Full market coverage – differentiated marketing;

undifferentiated marketing

Multiple segment specialization – super

segments; product specialization; market specialization

Single Segment - niche

Individual Segment – mass customization

Thank you !!


Documents

Marketing Management (MKT 511) Delivered by: Dr. Shilpa Iyanna · In behavioral segmentation, marketers divide buyers into groups on the basis of their knowledge of, attitude towards,