Chapter 9 - Identifying Market Segments and Selecting Target Markets doc

Chapter 9Identifying Market Segments and Selecting Target Markets PowerPoint by Karen E..  Learn how companies identify the segments that make up a market.. Target Marketing Target m

Chapter 9

Identifying Market Segments and Selecting

Target Markets

PowerPoint by Karen E James Louisiana State University - Shreveport

 Learn how companies identify the

segments that make up a market.

 Understand the criteria companies

use to choose the most attractive market segments.

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.

Using Market Segmentation

 Mass marketing is losing popularity

 Micromarketing can be undertaken at four levels:

– Segment marketing

– Niche marketing

– Local marketing

– Individual marketing

Using Market Segmentation

 Three patterns of preference

segments are typically identified:

– Homogeneous preferences

– Diffused preferences

– Clustered preferences

Using Market Segmentation

 Needs-based

segmentation

 Segment

identification

 Segment

attractiveness

 Segment

profitability

 Segment

positioning

 Segment

“acid test”

 Marketing-mix strategy

Needs-based Segmentation Process

Using Market Segmentation

 Useful market segments share

certain characteristics:

– Measurable

– Substantial

– Accessible

– Differentiable

– Actionable

Segmenting Consumer Markets

Bases for

Segmentation

 Geographic

 Demographic

 Psychographic

 Behavioral

 Nation or country

 State or region

 City or metro size

 Density

 Climate

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

Segmenting Consumer Markets

Bases for

Segmentation

 Geographic

 Demographic

 Psychographic

 Behavioral

 Lifestyle

– Activities – Interests – Opinions

 Personality

 Core values

Segmenting Consumer Markets

Bases for

Segmentation

 Geographic

 Demographic

 Psychographic

 Behavioral

Segmenting Consumer Markets

 Multi-attribute segmentation via

geoclustering combines multiple

variables to identify smaller,

better-defined target groups

– PRIZM Geoclustering system uses

demographic, geographic, lifestyle, and behavioral characteristics

Segmenting Business Markets

 Operating

variables

 Purchasing

approaches

 Situational factors

 Personal characteristics

Bases for Segmentation

 Demographic variables

Segmenting Business Markets

 Rackman and Vincentis proposed a

segmentation scheme that classifies

business buyers into three groups:

via transactional selling

served by means of consultative selling

by means of enterprise selling

Market Targeting Strategies

 Evaluating and selecting market

segments requires assessing the

segment’s overall attractiveness in

light of company’s objectives and

resources.

 Five patterns of target market

selection can then be considered.

Market Targeting Strategies

 Single-segment

concentration

 Selective

specialization

 Product specialization

 Market specialization

Patterns of Target Market Selection

 Full market coverage

Market Targeting Strategies

 Targeting multiple segments may

result in cost economies

 Supersegment targeting may be

appropriate

 Blocked markets often require

megamarketing countermeasures

 Be aware of ethical concerns