Lectures Marketing management: Chapter 8 - ThS. Nguyễn Tiến Dũng

Lectures "Marketing management - Chapter 8: Identifying market segments and selecting target markets" provides students with the knowledge: Market segmentation, choosing target markets.  Invite you to refer to the disclosures.

CHAPTER 8 IDENTIFYING MARKET SEGMENTS AND

SELECTING TARGET MARKETS

Nguyen Tien Dung, MBA Email: dung.nguyentien3@hust.edu.vn

Main Contents

1 Market Segmentation

2 Choosing Target Markets

1 Market Segmentation

● Bases to Segment Markets

● Procedure to Segment Markets

1.1 Bases to Segment Markets

PRIZM (Potential Rating Index by Zip Markets)

● A geoclustering approach

● 39 factors in five broad categories:

● (1) education and affluence,

● (2) family life cycle,

● (3) urbanization,

● (4) race and ethnicity, and

● (5) mobility

Demographic Segmentation

Psychological Segmentation

Behavioral Segmentation

● Constellation Brands identified six different benefit

segments in the U.S premium wine market ($5.50 a

bottle and up).

● Enthusiast (12 percent of the market) Skewing female,

their average income is about $76,000 a year About 3

percent are “luxury enthusiasts” who skew more male

with a higher income.

● Image Seekers (20 percent) The only segment that

skews male, with an average age of 35 They use wine basically as a badge to say who they are, and they’re

willing to pay more to make sure they’re getting the right bottle.

● Savvy Shoppers (15 percent) They love to shop and

believe they don’t have to spend a lot to get a good bottle

of wine Happy to use the bargain bin.

● Traditionalist (16 percent) With very traditional

values, they like to buy brands they’ve heard of and from wineries that have been around a long time Their average age is 50 and they are 68 percent female.

● Satisfied Sippers (14 percent) Not knowing

much about wine, they tend to buy the same

brands About half of what they drink is white

zinfandel.

● Overwhelmed (23 percent) A potentially

attractive target market, they find purchasing

wine confusing.

Segmentation by Loyalty

● flexible market

offering consists of

two parts:

● a naked solution

containing the product

and service elements

that all segment

members value, and

Segmentation Procedure

Click, Lead

Low income Super Dream

Wave RS Wave RS

2 Choosing Target Markets

● Effective Segmentation Criteria

● Evaluating and Selecting the Market

Segments

Effective Segmentation Criteria

● Measurable The size, purchasing power, and

characteristics of the segments can be measured.

● Substantial The segments are large and profitable

enough to serve

● Accessible The segments can be ffectively reached

and served.

● Differentiable The segments are conceptually

distinguishable and respond differently to different

marketing-mix elements and programs

● Actionable Effective programs can be formulated

for attracting and serving the segments.

Evaluating Market Segments

● Segment attractiveness

● Market size

● Competitors: Five Forces Model

● Company objectives and resources

● Objectives

Five Forces Model by Michael Porter

Possible Levels of Segmentation

Three Target-Market Strategies

● Undifferentiated marketing

● Focused marketing

● Differentiated marketing

Five Target-Market Strategies

Undifferentiated marketing

● Assumptions: customers are

similar in terms of wants and

Focused marketing strategy

● Customers are different in terms of wants and affordability

● One or few market segments

● For each segment, design a product form and a mix for this segment.

marketing-Market segment 1

Market segment 3

Market segment 2

Marketing-mix

Differentiated marketing

● Assumtion: Customers are different in tastes and ability to pay

● Many segments or all segments to serve.

● For each segment, design a product form and a marketing-mix program for this segment.

Market Segment 3

Market Segment 1 Market Segment 2 Marketing-mix 1

Marketing-mix 2

Target-Market Strategies by Product and Market

Full Market Coverage

• Differentiated marketing

• Undifferentiated marketing

A niche market

■ A market segment with small sizes, often be ignored by large