Chapter 9 - Identifying Market Segments and Selecting Target Markets doc

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
To accompany A Framework for
Marketing Management, 2nd Edition
Slide 11 in
Chapter 9

©
2003 Prentice Hall, Inc.
Segmenting Consumer Markets
Segmenting Consumer Markets
Bases for
Segmentation

Geographic

Demographic

Psychographic

Behavioral

Occasions

Benefits

User status

Usage rate

Loyalty status

Buyer-readiness

Attitude
To accompany A Framework for
Marketing Management, 2nd Edition

Slide 12 in
Chapter 9
©
2003 Prentice Hall, Inc.
Segmenting Consumer Markets
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
To accompany A Framework for
Marketing Management, 2nd Edition
Slide 13 in
Chapter 9
©
2003 Prentice Hall, Inc.
Segmenting Business Markets
Segmenting Business Markets

Operating
variables

Purchasing
approaches


Situational
factors

Personal
characteristics
Bases for Segmentation

Demographic variables
To accompany A Framework for
Marketing Management, 2nd Edition
Slide 14 in
Chapter 9
©
2003 Prentice Hall, Inc.
Segmenting Business Markets
Segmenting Business Markets

Rackman and Vincentis proposed a
segmentation scheme that classifies
business buyers into three groups:
–
Price-oriented customers: best served
via transactional selling
–
Solution-oriented customers: best
served by means of consultative selling
–
Strategic-value customers: best served
by means of enterprise selling
To accompany A Framework for

Marketing Management, 2nd Edition
Slide 15 in
Chapter 9
©
2003 Prentice Hall, Inc.
Market Targeting Strategies
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.
To accompany A Framework for
Marketing Management, 2nd Edition
Slide 16 in
Chapter 9
©
2003 Prentice Hall, Inc.
Market Targeting Strategies
Market Targeting Strategies

Single-segment
concentration

Selective
specialization


Product
specialization

Market
specialization
Patterns of Target Market Selection

Full market coverage
To accompany A Framework for
Marketing Management, 2nd Edition
Slide 17 in
Chapter 9
©
2003 Prentice Hall, Inc.
Market Targeting Strategies
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