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To accompany A Framework for Marketing Management, 2nd Edition Slide 1 in Chapter 9 © 2003 Prentice Hall, Inc. Chapter 9 Chapter 9 Identifying Market Identifying Market Segments and Selecting Segments and Selecting Target Markets Target Markets PowerPoint by Karen E. James PowerPoint by Karen E. James Louisiana State University - Shreveport Louisiana State University - Shreveport To accompany A Framework for Marketing Management, 2nd Edition Slide 2 in Chapter 9 © 2003 Prentice Hall, Inc. Objectives Objectives  Learn how companies identify the segments that make up a market.  Understand the criteria companies use to choose the most attractive market segments. To accompany A Framework for Marketing Management, 2nd Edition Slide 3 in Chapter 9 © 2003 Prentice Hall, Inc. Target Marketing Target Marketing  Target marketing requires marketers to take three major steps: – Market segmentation: Identifying and profiling distinct groups of buyers who differ in their needs and preferences. – Market targeting: Selecting one or more market segments to enter. – Market positioning: Establishing and communicating the key distinctive benefit(s) of the company’s market offering to each target. To accompany A Framework for Marketing Management, 2nd Edition Slide 4 in Chapter 9 © 2003 Prentice Hall, Inc. Using Market Segmentation Using Market Segmentation  Mass marketing is losing popularity  Micromarketing can be undertaken at four levels: – Segment marketing – Niche marketing – Local marketing – Individual marketing To accompany A Framework for Marketing Management, 2nd Edition Slide 5 in Chapter 9 © 2003 Prentice Hall, Inc. Using Market Segmentation Using Market Segmentation  Three patterns of preference segments are typically identified: – Homogeneous preferences – Diffused preferences – Clustered preferences To accompany A Framework for Marketing Management, 2nd Edition Slide 6 in Chapter 9 © 2003 Prentice Hall, Inc. Using Market Segmentation Using Market Segmentation  Needs-based segmentation  Segment identification  Segment attractiveness  Segment profitability  Segment positioning  Segment “acid test”  Marketing-mix strategy Needs-based Segmentation Process To accompany A Framework for Marketing Management, 2nd Edition Slide 7 in Chapter 9 © 2003 Prentice Hall, Inc. Using Market Segmentation Using Market Segmentation  Useful market segments share certain characteristics: – Measurable – Substantial – Accessible – Differentiable – Actionable To accompany A Framework for Marketing Management, 2nd Edition Slide 8 in Chapter 9 © 2003 Prentice Hall, Inc. Segmenting Consumer Markets Segmenting Consumer Markets Bases for Segmentation  Geographic  Demographic  Psychographic  Behavioral  Nation or country  State or region  City or metro size  Density  Climate To accompany A Framework for Marketing Management, 2nd Edition Slide 9 in Chapter 9 © 2003 Prentice Hall, Inc. Segmenting Consumer Markets Segmenting Consumer Markets Bases for Segmentation  Geographic  Demographic  Psychographic  Behavioral  Age, race, gender  Income, education  Family size  Family life cycle  Occupation  Religion, nationality  Generation  Social class To accompany A Framework for Marketing Management, 2nd Edition Slide 10 in Chapter 9 © 2003 Prentice Hall, Inc. Segmenting Consumer Markets Segmenting Consumer Markets Bases for Segmentation  Geographic  Demographic  Psychographic  Behavioral  Lifestyle – Activities – Interests – Opinions  Personality  Core values