SEGMENTATION AND THE TARGET MARKETPrinciples of Marketing BUSI 141 | Professor ConradSolomon, M. B., Marshall, G. W., & Stuart, E. W. (2016). Marketing: Real People, Real Choices (8th ed.). Boston: Pearson Education, Inc.

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WHAT WE WILL DISCUSS TODAY

•Select and Enter a Market •Segmenting the Market•Demographic•Geographic• Psychographic• Behavioral

• Targeting• Positioning

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SELECT & ENTER A MARKETPAGES 194 – 195

• Market defined• All customers and potential customers• Share a common need satisfied by a specific product• That can make the exchange

• Resources• Willingness• Authority

• Goals of the marketer (you!)• Create value• Build customer relationships• Satisfy needs

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SELECT & ENTER A MARKETPAGES 194 – 195

• Mass Marketing• Costs less• Eliminates need for

• Separate advertising campaigns• Distinctive packaging

• Least effective marketing strategy• Target market strategy• Divide total market into segments based on consumer

characteristics• Select one or more segments• Develop products to meet the needs of specific segments

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Segmentation Targeting Positioning

THREE-STEP PROCESSPAGES 194 – 195

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SEGMENTATIONPAGES 195 – 207

The process of dividing a larger market into smaller pieces on one or more meaningful, shared characteristic.

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Geographic• Country• Region• State• City• Weather

Demographic• Age• Generation• Gender• Income• Family Life

Cycle• Education• Social Class• Ethnicity

Psychographic• AIOs

• Activities• Interests• Opinions

• VALS• Values• Lifestyles

Behavioral• Users• Nonusers• Usage Rate• Usage

Occasions

SEGMENTATIONPAGES 195 – 207

VALS FRAMEWORK• Based on three primary

consumer motivations:• Ideals• Achievements• Self-expression

• Learn more about segments• VALS types

• Take the VALS survey• Survey link

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TARGETINGPAGES 207 – 210

Evaluating the attractiveness of each potential segment and deciding in which of these groups you will invest resources to

try to turn them into consumers.

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TARGETINGPAGES 207 – 210

The result is your Target Audience… the segment(s) that becomes the focus of the marketing plan and efforts.

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Evaluate Market Segments

Develop Segment Profiles

Choose Targeting Strategy

THREE-STEP PROCESSPAGES 207 – 210

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EVALUATE MARKET SEGMENTS

PAGES 207 – 210 • Are customers similar to product needs AND different

from customers in other segments?• Is segment measurable? Is it worth the effort?• Is segment large enough to be profitable?• Can you communicate with the segment?• Can you serve the needs of the segment?

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DEVELOP SEGMENT PROFILES

PAGES 207 – 210 • Do CP – Customer Profiling• Describe the customer

(Demographic, psychographic)

• Locate the customer (Geographic)

• Define their needs and purchase behavior

• Connect with current customers/conduct research

• Create a “portrait” of the “typical” customer in the segment

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CHOOSE A TARGETING STRATEGY

PAGES 207 – 210 • Undifferentiated targeting strategy• Differentiated targeting strategy• Concentrated targeting strategy• Customized marketing strategy• Mass customization

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Developing a marketing strategy to influence how a particular market segment perceives a good/service in comparison to the

competition.

POSITIONINGPAGES 210 – 214

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