Lecture Marketing management - Chapter 8: Identifying market segments and targets presentation of content: Market segmentation, choosing target markets, steps in segmentation process.... And other contents.
1 Identifying Market Segments and Targets Market Segmentation Types of Segmentation 80 percent of a company’s sales are generated by 20 percent of its loyal customers Section 2.2 Market Segmentation Mass Marketing Vs Segmentation Mass Marketing Advantages Disadvantage • Economics of scale • Simplified marketing plan • Competitors can identify unmet needs and wants and then steal customers mass marketing Using a single marketing strategy to reach all customers Section 2.2 Market Segmentation Mass Marketing Vs Segmentation Niche Marketing Advantages • Extremely precise • Increased chance for success Disadvantage • Cost – Research – Production – Packaging – Advertising 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? Copyright © 2011 Pearson Education, Inc Publishing as Prentice Hall 8-5 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 Copyright © 2011 Pearson Education, Inc Publishing as Prentice Hall 8-6 What is a Market Segment? A market segment consists of a group of customers who share a similar set of needs and wants Copyright © 2011 Pearson Education, Inc Publishing as Prentice Hall 8-7 Segmenting Consumer Markets Geographic Demographic Psychographic Behavioral Copyright © 2011 Pearson Education, Inc Publishing as Prentice Hall 8-8 Market Segmentation Market Segmentation Types of Segmentation Demographic Geographic Psychographic Age Local Attitudes Gender State Opinions Income Regional Interests Marital status National Activities Ethnic background Global Personality Behavioral Shopping Patterns Decisionmaking process Values demographic psychographic Statistics that describe a population in terms of personal characteristics such as age, gender, income, marital status, and ethnic background Grouping people with similar attitudes, interests, and opinions, as well as lifestyles and shared values Generational Influences Copyright © 2011 Pearson Education, Inc Publishing as Prentice Hall 8-18 Race and Culture Copyright © 2011 Pearson Education, Inc Publishing as Prentice Hall 8-19 Psychographic Segmentation and The VALS Framework Copyright © 2011 Pearson Education, Inc Publishing as Prentice Hall 8-20 Behavioral Segmentation Based on Needs and Benefits Copyright © 2011 Pearson Education, Inc Publishing as Prentice Hall 8-21 Behavioral Segmentation: Decision Roles Initiator Influencer Decider Buyer User Copyright © 2011 Pearson Education, Inc Publishing as Prentice Hall 8-22 Behavioral Segmentation: Behavioral Variables Occasions Benefits User Status Usage Rate Copyright © 2011 Pearson Education, Inc Publishing as Prentice Hall Buyer-Readiness Loyalty Status Attitude 8-23 Figure 8.2 Example of a Brand Funnel Copyright © 2011 Pearson Education, Inc Publishing as Prentice Hall 8-24 Loyalty Status Hard-core Split loyals Shifting loyals Switchers Copyright © 2011 Pearson Education, Inc Publishing as Prentice Hall 8-25 Figure 8.3 Behavioral Segmentation Breakdown Copyright © 2011 Pearson Education, Inc Publishing as Prentice Hall 8-26 Segmenting for Business Markets Demographic Operating variable Purchasing approaches Situational factors Personal characteristics Copyright © 2011 Pearson Education, Inc Publishing as Prentice Hall 8-27 Steps in Segmentation Process Need-based segmentation Segment identification Segment attractiveness Segment profitability Segment positioning Segment acid test Market mix strategy Copyright © 2011 Pearson Education, Inc Publishing as Prentice Hall 8-28 Effective Segmentation Criteria Measurable Substantial Accessible Differentiable Actionable Copyright © 2011 Pearson Education, Inc Publishing as Prentice Hall 8-29 Porter’s Forces Model Threat of Rivalry Threat of Buyer Bargaining Power Threat of Supplier Bargaining Power Threat of Substitutes Threat of New Entrants Copyright © 2011 Pearson Education, Inc Publishing as Prentice Hall 8-30 Figure 8.4 Possible Levels of Segmentation Copyright © 2011 Pearson Education, Inc Publishing as Prentice Hall 8-31 For Review 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? Copyright © 2011 Pearson Education, Inc Publishing as Prentice Hall 8-32 ... Segmentation Mass Marketing Vs Segmentation Niche Marketing Advantages • Extremely precise • Increased chance for success Disadvantage • Cost – Research – Production – Packaging – Advertising Chapter Questions... Disadvantage • Economics of scale • Simplified marketing plan • Competitors can identify unmet needs and wants and then steal customers mass marketing Using a single marketing strategy to reach all customers... Types of Segmentation 80 percent of a company’s sales are generated by 20 percent of its loyal customers Section 2.2 Market Segmentation Mass Marketing Vs Segmentation Mass Marketing Advantages