3. Meaning
Market segmentation is a marketing
strategy that involves dividing a
broad target market into subsets
of consumers who have common needs,
and then designing and implementing
strategies to target their needs and
desires using media channels and other
touch-points that best allow to reach
them.
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4. Product differentiation
Market segments allow companies to
create product differentiation strategies
to target them.
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5. Market Segmentation Strategies
Traditional Approaches to Market
Segmentation
Mass Marketing
Differentiated Marketing
Multisegment Approach
Market Concentration Approach
Niche Marketing
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6. Bases for Segmenting
Consumer Markets
Behavioral Segmentation
Demographic Segmentation
Segments based on demographic factors (e.g.,
gender, age, income, education, etc.)
Psychographic Segmentation
Segments based on actual behavior or product usage
Segments based on state-of-mind issues (e.g.,
motives, attitudes, opinions, values, lifestyles,
interests, personality, etc.)
Geographic Segmentation
Segments based on geographic location
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7. Segmenting Consumer Markets
Sometimes, multiple attributes are combined
to form segments
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
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8. 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
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10. Creating the Marketing Mix
PRODUCT
PRICE
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PLACE
PROMOTION College
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11. Goals for Marketing Mix
Create synergies
Use resources
effectively
Maintain consistent and
differentiated image
Link to specific
marketing goals and
objectives
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17. Target Marketing Strategies
Five basic strategies for target market
selection:
(1) Single Segment Targeting
(2) Selective Targeting
(3) Mass Market Targeting
(4) Product Specialization
(5) Market Specialization
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18. Basic Target Marketing Strategies
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19. Discussion Question
Can you think of a product that could be
marketed effectively using a mass
marketing approach? If so, explain and
justify your answer. If not, what types of
changes would have to be made to the
product to make it appropriate for a mass
marketing approach?
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20. Discussion Question
Many consumers and consumer advocates
are critical of the one-to-one marketing
approach due to personal privacy concerns.
Marketers counter that one-to-one marketing
can lead to privacy abuses, but that the
benefits to both consumers and marketers
far outweigh the risks. Where do you stand
on this issue? Why?
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21. Discussion Question
What are some of the ethical and legal
issues involved in targeting sensitive
groups such as children and seniors?
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