SEGMENTING AND TARGETING MARKET

8/14/2019 SEGMENTING AND TARGETING MARKET

1/39

SEGMENTING AND TARGETING

MARKETS

CHAPTER 4


2/39

LEARNING OUTCOMES

Describe the characteristics of markets

and market segments

Explain the importance of marketsegmentation

Discuss criteria for successful marketsegmentation

Describe the bases commonly used tosegment consumer markets


3/39

Describe the bases for segmentingbusiness markets

List the steps involved in segmenting markets

Discuss alternative strategies for selecting

target markets

Explain one-to-one marketing

Explain how and why firms implementpositioning strategies and how product

differentiation plays a role


4/39

A MARKET IS...

(1)people or organizations with

(2) needs or wants, and with

(3) the ability and

(4) the willingness to buy.

A group of people that lacks any one ofthese characteristics is not a market.


5/39

MARKET SEGMENTATION

MarketPeople or organizations with

needs or wants and the abilityand willingness to buy.

MarketSegment

A subgroup of people ororganizations sharing one or more

characteristics that cause themto have similar product needs.

MarketSegmentation

The process of dividing a marketinto meaningful, relatively similar,

identifiable segments or groups.


6/39

THE CONCEPT OF MARKETSEGMENTATION


7/39

THE IMPORTANCE OF

MARKET SEGMENTATION

Markets have a variety of product

needs and preferences

Marketers can better define

customer needs

Decision makers can define objectives

and allocate resources more accurately


8/39

Marketsegmentation

More precisedefinition ofcustomersneeds and

wants

More

accuratemarketingobjectives

Improvedresourceallocation

Bettermarketing

results


9/39

CRITERIA FOR SEGMENTATION

Accessibility

Members of targetedsegments must be reachable

withmarketing mix.

ResponsivenessUnless segment responds to amarketing mix differently, noseparate treatment is needed.


10/39

BASES FOR SEGMENTING CONSUMER

MARKETS

SegmentationBases

Characteristics ofindividuals, groups, or

organizations used to

divide a total market into

segments.

(variables)


11/39

BASES FOR SEGMENTATION

Usage RateUsage Rate

Benefits SoughtBenefits Sought

PsychographicsPsychographics

DemographicsDemographics

GeographyGeography


12/39

GEOGRAPHIC SEGMENTATION

Region of the country or world

Market size

Market density

Climate

OG C


13/39

DEMOGRAPHICSEGMENTATION

AgeAge

GenderGender

IncomeIncome

Ethnic backgroundEthnic background

Family life cycleFamily life cycle


14/39

PSYCHOGRAPHICSEGMENTATION

Psychographic

SegmentationMarket segmentation

on the basis of

personality, motives,

lifestyles, and

geodemographics.


15/39


16/39

Usage-RateSegmentation

Dividing a market by the

amount of product bought

or consumed.

80/20Principle

A principle holding that

20 percent of all customers

generate 80 percent of

the demand.


17/39

BASES FOR SEGMENTING BUSINESSMARKETS

CompanyCharacteristic

s

CompanyCharacteristic

s

BuyingProcesses

BuyingProcesses

ProducersProducers

ResellersResellers

GovernmentGovernment

InstitutionsInstitutions


18/39

Company Characteristics

BASES FOR SEGMENTING BUSINESSMARKETS

Geographic location

Type of company

Company size

Volume of purchase

Product use


19/39

BUYER CHARACTERISTICS


20/39

Demographic characteristicsDemographic characteristics

Decision styleDecision style

Tolerance for riskTolerance for risk

Confidence levelConfidence level

Job responsibilitiesJob responsibilities

BUYER CHARACTERISTICS


21/39

STEPS IN SEGMENTING MARKETS

Selecta

market

forstudy

Choosebasesfor

segmentation

Selectdescript

ors

Profileand

analyzesegment

s

Selecttargetmarket

s

Design,impleme

nt,maintainmarketin

gmix


22/39

STRATEGIES FOR SELECTING TARGETMARKETS

TargetMarket

A group of people or

organizations for which

an organization designs,

implements, and

maintains a marketing

mix intended to meet the

needs of that group,resulting in mutually

satisfying exchanges.


23/39

Undifferentiated Multisegment Concentrated


24/39

UNDIFFERENTIATED TARGETINGSTRATEGY

UndifferentiatedTargetingStrategy

A marketing approach

that views the market as

one big market with no

individual segments and

thus

requires a single

marketing mix.


25/39

UndifferentiatedStrategy

UNDIFFERENTIATED TARGETING

STRATEGYAdvantage:

Potential savings onproduction and marketingcosts

Disadvantages:

Unimaginative productofferings

Company more susceptibleto competition


26/39

Concentrated

Targeting Strategy

CONCENTRATED TARGETINGSTRATEGY

A strategy used to select

onesegment of a market for

targeting marketing

efforts.

Niche

One segment of a

market.


27/39

CONCENTRATED TARGETINGSTRATEGY

ConcentratedStrategy

Advantages: Concentration of

resources

Meets narrowly definedsegment

Small firms can compete Strong positioning

Disadvantages: Segments too small, or

changing Large competitors may

market to niche segment


28/39

MultisegmentTargetingStrategy

MULTISEGMENT TARGETINGSTRATEGY

A strategy that chooses

two or more well-defined

market segments and

develops a distinct

marketing

mix for each.


29/39

MULTISEGMENT TARGETINGSTRATEGY

MultisegmentStrategy

Advantages:

Greater financial success Economies of scale

Disadvantages:

High costs Cannibalization


30/39

ONE-TO-ONE MARKETING

One-to-One

Marketing


31/39

Information-IntensiveInformation-Intensive

Long-TermLong-Term

One-to-OneMarketing is...One-to-One

Marketing is...

IndividualizedIndividualized

Cost ReductionCost Reduction

Has a Goal ofHas a Goal of

Customer LoyaltyCustomer Loyalty

Increased RevenueIncreased Revenue

PersonalizedPersonalized

Customer RetentionCustomer Retention


32/39

Trends (one-to-one marketing)

1. One-size-fits all marketing no longereffective.

2. Direct and personal marketing will growto meet needs of busy consumers.

3. Consumers will be loyal to companies that

have earnedand reinforcedtheirloyalty.

4. Mass-media approaches will decline as

technology allows better customertrackin .


33/39

Positioning

POSITIONING

Developing a specific

marketing mix to influence

potential customers overall

perception of a brand,

product line, or organization

in general.


34/39

EFFECTIVE POSITIONING

1. Assess the positions occupied bycompeting products

2. Determine the dimensionsunderlying these positions

3. Choose a market position wheremarketing efforts will have the

greatest impact


35/39

Product

Differentiation

PRODUCTDIFFERENTIATION

A positioning strategy

that some firms use todistinguish their products

from those ofcompetitors.

Distinctions can be realor perceived.


36/39


37/39

Repositioning

REPOSITIONING

Changing consumers

perceptions of a brand inrelation to competing

brands.


38/39

Positioning and Product Differentiation


39/39

THANKYOU

Documents

SEGMENTING AND TARGETING MARKET