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Chapter 8 - Identifying market segments and targets. In this chapter, we will address the following questions: What are the different levels of market segmentation? In what ways 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?
Phillip Kevin Lane Kotler • Keller Marketing Management • 14e a h C r e t p Identifying Market Segments and Targets Discussion Questions What are the different levels of market segmentation? In what ways 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 © 2012 Pearson Education, Inc Publishing as Prentice Hall Slide of 26 Target Marketing Requirements Identify and profile distinct groups of buyers (market segmentation) Select one or more market segments to enter (market targeting) For each, establish and communicate benefits of offering (market positioning) Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall Slide of 26 Bases for Segmenting Consumers Geographic Demographic Psychographi Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall Behavioral Slide of 26 Geographic Segmentation Geoclustering Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall Slide of 26 Demographic Segmentation Age and Life-cycle Stage Life Stage Gender Income Generation Race and Culture Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall Slide of 26 Age and Life-Cycle Stage Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall Slide of 26 Life Stage Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall Slide of 26 Gender Women: Influence 80% of consumer purchases Make 75% of new home decisions Purchase 60% of cars Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall Slide 10 of 26 Generation Gen X (1964-1978) Baby Boomers (1946-1964) Silent Generation (1925-1945) Millennials (Gen Y) – (19791994) -78 Million people -$187 annual spending power Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall Slide 12 of 26 U.S Generation Cohorts Cohort Size Defining Features Millennials 78 m Raised in affluence, tech savvy, perceived immunity from marketing 50 m Parents relied on day care, accepts diversity, pragmatic and individualistic Baby Boomers 76 m Control 3/4th of the wealth in the U.S, seek fountain of youth (hair color, hair replacement), home exercise equipment Silent Generation 42 m Lead vibrant lives, spend money and time on grandchildren (1979-1994) Gen X (1964-1978) (1946-1964) (1925-1945) Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall Slide 13 of 26 Race and Culture Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall Slide 14 of 26 Multicultural Market Profile Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall Slide 15 of 26 Psychographic Segmentation • Personality traits • Lifestyle • Values Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall Slide 16 of 26 g i F e r u VALS Segmentation System Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall Slide 17 of 26 Behavioral Segmentation Usage occasions User status Usage rate Buyer-readiness Loyalty status Decision Roles User and Usage Needs and Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall Slide 18 of 26 g i F e r u Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall Brand Funnel Slide 19 of 26 Consumer Attitudes Enthusiasti c Positive Indifferent Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall Negativ e Hostile Slide 20 of 26 g i F e r u Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall Behavioral Segmentation Slide 21 of 26 Bases for Segmenting B2B Markets Demographic Industry, company size, location Operating Variables Technology, user status, customer capabilities Purchasing Approach Power structure, nature of existing relationship Situational Factors Urgency, specific application, size of order Personal Characteristics Buyer-seller similarity, loyalty, risk attitude Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall Slide 22 of 26 Market Targeting Effective Segmentation Criteria Measurable Substantial Accessible Differentiable Actionable Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall Slide 23 of 26 Market Targeting Porter’s Five Force Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall Slide 24 of 26 Evaluating and Selecting Segments Multiple segment specialization Full market coverage Singlesegment concentration Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall Individual marketing Slide 25 of 26 g i F e r u Levels of Segmentation Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall Slide 26 of 26 ... Slide 11 of 26 Generation Gen X (196 4-1 9 78) Baby Boomers (194 6-1 964) Silent Generation (192 5-1 945) Millennials (Gen Y) – (19791994) - 78 Million people -$ 187 annual spending power Copyright ©... Generation 42 m Lead vibrant lives, spend money and time on grandchildren (197 9-1 994) Gen X (196 4-1 9 78) (194 6-1 964) (192 5-1 945) Copyright © 2012 Pearson Education, Inc Publishing as Prentice Hall... U.S Generation Cohorts Cohort Size Defining Features Millennials 78 m Raised in affluence, tech savvy, perceived immunity from marketing 50 m Parents relied on day care, accepts diversity, pragmatic