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Chapter 9 Identifying Market Segments and Selecting Target Markets PowerPoint by Karen E. James Louisiana State University...
Objectives <ul><li>Learn how companies identify the segments that make up a market. </li></ul><ul><li>Understand the crite...
Target Marketing <ul><li>Target marketing requires marketers to take three major steps: </li></ul><ul><ul><li>Market segme...
Using Market Segmentation <ul><li>Mass marketing is losing popularity </li></ul><ul><li>Micromarketing can be undertaken a...
Using Market Segmentation <ul><li>Three patterns of preference segments are typically identified: </li></ul><ul><ul><li>Ho...
Using Market Segmentation <ul><li>Needs-based segmentation </li></ul><ul><li>Segment identification </li></ul><ul><li>Segm...
Using Market Segmentation <ul><li>Useful market segments share certain characteristics: </li></ul><ul><ul><li>Measurable <...
Segmenting Consumer Markets <ul><li>Bases for Segmentation </li></ul><ul><li>Geographic </li></ul><ul><li>Demographic </li...
Segmenting Consumer Markets <ul><li>Bases for Segmentation </li></ul><ul><li>Geographic </li></ul><ul><li>Demographic </li...
Segmenting Consumer Markets <ul><li>Bases for Segmentation </li></ul><ul><li>Geographic </li></ul><ul><li>Demographic </li...
Segmenting Consumer Markets <ul><li>Bases for Segmentation </li></ul><ul><li>Geographic </li></ul><ul><li>Demographic </li...
Segmenting Consumer Markets <ul><li>Multi-attribute segmentation via  geoclustering  combines multiple variables to identi...
Segmenting Business Markets <ul><li>Operating variables </li></ul><ul><li>Purchasing approaches </li></ul><ul><li>Situatio...
Segmenting Business Markets <ul><li>Rackman and Vincentis proposed a segmentation scheme that classifies business buyers i...
Market Targeting Strategies <ul><li>Evaluating and selecting market segments requires assessing the segment’s overall attr...
Market Targeting Strategies <ul><li>Single-segment concentration </li></ul><ul><li>Selective specialization </li></ul><ul>...
Market Targeting Strategies <ul><li>Targeting multiple segments may result in cost economies </li></ul><ul><li>Supersegmen...
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Identifying Market Segments and Selecting Target Markets

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Identifying Market Segments and Selecting Target Markets

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Identifying Market Segments and Selecting Target Markets

  1. 1. Chapter 9 Identifying Market Segments and Selecting Target Markets PowerPoint by Karen E. James Louisiana State University - Shreveport
  2. 2. Objectives <ul><li>Learn how companies identify the segments that make up a market. </li></ul><ul><li>Understand the criteria companies use to choose the most attractive market segments. </li></ul>
  3. 3. Target Marketing <ul><li>Target marketing requires marketers to take three major steps: </li></ul><ul><ul><li>Market segmentation: Identifying and profiling distinct groups of buyers who differ in their needs and preferences. </li></ul></ul><ul><ul><li>Market targeting: Selecting one or more market segments to enter. </li></ul></ul><ul><ul><li>Market positioning: Establishing and communicating the key distinctive benefit(s) of the company’s market offering to each target. </li></ul></ul>
  4. 4. Using Market Segmentation <ul><li>Mass marketing is losing popularity </li></ul><ul><li>Micromarketing can be undertaken at four levels: </li></ul><ul><ul><li>Segment marketing </li></ul></ul><ul><ul><li>Niche marketing </li></ul></ul><ul><ul><li>Local marketing </li></ul></ul><ul><ul><li>Individual marketing </li></ul></ul>
  5. 5. Using Market Segmentation <ul><li>Three patterns of preference segments are typically identified: </li></ul><ul><ul><li>Homogeneous preferences </li></ul></ul><ul><ul><li>Diffused preferences </li></ul></ul><ul><ul><li>Clustered preferences </li></ul></ul>
  6. 6. Using Market Segmentation <ul><li>Needs-based segmentation </li></ul><ul><li>Segment identification </li></ul><ul><li>Segment attractiveness </li></ul><ul><li>Segment profitability </li></ul><ul><li>Segment positioning </li></ul><ul><li>Segment “acid test” </li></ul><ul><li>Marketing-mix strategy </li></ul>Needs-based Segmentation Process
  7. 7. Using Market Segmentation <ul><li>Useful market segments share certain characteristics: </li></ul><ul><ul><li>Measurable </li></ul></ul><ul><ul><li>Substantial </li></ul></ul><ul><ul><li>Accessible </li></ul></ul><ul><ul><li>Differentiable </li></ul></ul><ul><ul><li>Actionable </li></ul></ul>
  8. 8. Segmenting Consumer Markets <ul><li>Bases for Segmentation </li></ul><ul><li>Geographic </li></ul><ul><li>Demographic </li></ul><ul><li>Psychographic </li></ul><ul><li>Behavioral </li></ul><ul><li>Nation or country </li></ul><ul><li>State or region </li></ul><ul><li>City or metro size </li></ul><ul><li>Density </li></ul><ul><li>Climate </li></ul>
  9. 9. Segmenting Consumer Markets <ul><li>Bases for Segmentation </li></ul><ul><li>Geographic </li></ul><ul><li>Demographic </li></ul><ul><li>Psychographic </li></ul><ul><li>Behavioral </li></ul><ul><li>Age, race, gender </li></ul><ul><li>Income, education </li></ul><ul><li>Family size </li></ul><ul><li>Family life cycle </li></ul><ul><li>Occupation </li></ul><ul><li>Religion, nationality </li></ul><ul><li>Generation </li></ul><ul><li>Social class </li></ul>
  10. 10. Segmenting Consumer Markets <ul><li>Bases for Segmentation </li></ul><ul><li>Geographic </li></ul><ul><li>Demographic </li></ul><ul><li>Psychographic </li></ul><ul><li>Behavioral </li></ul><ul><li>Lifestyle </li></ul><ul><ul><li>Activities </li></ul></ul><ul><ul><li>Interests </li></ul></ul><ul><ul><li>Opinions </li></ul></ul><ul><li>Personality </li></ul><ul><li>Core values </li></ul>
  11. 11. Segmenting Consumer Markets <ul><li>Bases for Segmentation </li></ul><ul><li>Geographic </li></ul><ul><li>Demographic </li></ul><ul><li>Psychographic </li></ul><ul><li>Behavioral </li></ul><ul><li>Occasions </li></ul><ul><li>Benefits </li></ul><ul><li>User status </li></ul><ul><li>Usage rate </li></ul><ul><li>Loyalty status </li></ul><ul><li>Buyer-readiness </li></ul><ul><li>Attitude </li></ul>
  12. 12. Segmenting Consumer Markets <ul><li>Multi-attribute segmentation via geoclustering combines multiple variables to identify smaller, better-defined target groups </li></ul><ul><ul><li>PRIZM Geoclustering system uses demographic, geographic, lifestyle, and behavioral characteristics </li></ul></ul>
  13. 13. Segmenting Business Markets <ul><li>Operating variables </li></ul><ul><li>Purchasing approaches </li></ul><ul><li>Situational factors </li></ul><ul><li>Personal characteristics </li></ul>Bases for Segmentation <ul><li>Demographic variables </li></ul>
  14. 14. Segmenting Business Markets <ul><li>Rackman and Vincentis proposed a segmentation scheme that classifies business buyers into three groups: </li></ul><ul><ul><li>Price-oriented customers: best served via transactional selling </li></ul></ul><ul><ul><li>Solution-oriented customers: best served by means of consultative selling </li></ul></ul><ul><ul><li>Strategic-value customers: best served by means of enterprise selling </li></ul></ul>
  15. 15. Market Targeting Strategies <ul><li>Evaluating and selecting market segments requires assessing the segment’s overall attractiveness in light of company’s objectives and resources. </li></ul><ul><li>Five patterns of target market selection can then be considered. </li></ul>
  16. 16. Market Targeting Strategies <ul><li>Single-segment concentration </li></ul><ul><li>Selective specialization </li></ul><ul><li>Product specialization </li></ul><ul><li>Market specialization </li></ul>Patterns of Target Market Selection <ul><li>Full market coverage </li></ul>
  17. 17. Market Targeting Strategies <ul><li>Targeting multiple segments may result in cost economies </li></ul><ul><li>Supersegment targeting may be appropriate </li></ul><ul><li>Blocked markets often require megamarketing countermeasures </li></ul><ul><li>Be aware of ethical concerns </li></ul>

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