chapter 8 identifying market segments and targets
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Phillip
Kevin Lane
Kotler • Keller
Marketing Management • 14e
Identifying Market
Segments and Targets
Discussion Questions
1. What are the different levels of market
segmentation?
2. In what ways can a company divide a market
into segments?
3. What are the requirements for effective
segmentation?
4. How should business markets be segmented?
5. How should a company choose the most
attractive target markets?
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall
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Target Marketing Requirements
1. Identify and profile distinct groups of
buyers (market segmentation).
2. Select one or more market segments to
enter (market targeting).
3. For each, establish and communicate
benefits of offering (market positioning).
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall
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Bases for Segmenting Consumers
Geographic
Demographic
Psychographic
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Behavioral
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Geographic Segmentation
Geoclustering
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Demographic Segmentation
Age and Life-cycle Stage
Life Stage
Gender
Income
Generation
Race and Culture
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Age and Life-Cycle Stage
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Life Stage
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Gender
Women:
Influence 80% of consumer purchases
Make 75% of new home decisions
Purchase 60% of cars
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Income
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Generation
Gen X (1964-1978)
Baby Boomers (1946-1964)
Silent Generation (1925-1945)
Millennials (Gen Y) – (1979-1994)
-78 Million people
-$187 annual spending power
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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
(1979-1994)
Gen X
(1964-1978)
Baby Boomers
(1946-1964)
Silent Generation
(1925-1945)
Control 3/4th of the wealth in the U.S,
76 m seek fountain of youth (hair color, hair
replacement), home exercise equipment
42 m
Lead vibrant lives, spend money and
time on grandchildren.
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Race and Culture
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Multicultural Market Profile
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Psychographic Segmentation
• Personality traits
• Lifestyle
• Values
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VALS Segmentation System
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Behavioral Segmentation
Usage occasions
Initiator
User status
User
Influencer
Usage rate
Buyer-readiness
Buyer
Decider
Decision Roles
Loyalty status
User and Usage
Needs and Benefits
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Brand Funnel
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Consumer Attitudes
Enthusiastic
Positive
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Indifferent
Negative
Hostile
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Behavioral Segmentation
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Bases for Segmenting B2B Markets
Demographic
Operating Variables
Purchasing Approach
Industry, company size, location
Technology, user status, customer capabilities
Power structure, nature of existing relationship
Situational Factors
Urgency, specific application, size of order
Personal Characteristics
Buyer-seller similarity, loyalty, risk attitude
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Market Targeting
Effective Segmentation Criteria
Measurable
Substantial
Accessible
Differentiable
Actionable
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Market Targeting
Porter’s Five Force
Substitute
Products
Buyer
Power
Supplier
Power
New
Entrants
Rivals
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Evaluating and Selecting Segments
Multiple segment
specialization
Full market coverage
Single-segment
concentration
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Individual marketing
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