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1. Market Segmentation
and Strategic Targeting
CHAPTER
THREE

2. Learning Objectives
1. To Understand Why Market Segmentation Is
Essential.
2. To Understand the Criteria for Targeting
Selected Segments Effectively.
3. To Understand the Bases for Segmenting
Consumers.
4. To Understand How Segmentation and
Strategic Targeting Are Carried Out.
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4. This Ad Targets Runners Who Are Physically
Active People and Also Relish the Outdoors.
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5. Why Segmentation is Necessary
• Consumer needs
differs
• Differentiation helps
products compete
• Segmentation helps
identify media
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6. Positioning
The value
proposition,
expressed through
promotion, stating
the product’s or
service’s capacity
to deliver specific
benefits.
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7. Criteria for Effective Targeting
Identifiable Sizeable
Stable Accessible
Congruent with the
company’s objectives
and resources
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8. Bases for Segmentation
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9. Consumer-Rooted Segmentation Bases
Demographics
Geodemographic
Personality Traits
Lifestyles
Sociocultural
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10. Demographic Segmentation
Age Gender
Marital Status
Family Life-
cycle
Income,
Education, and
Occupation
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11. Geodemographic Segmentation
• Based on geography and demographics
• People who live close to one another are
similar
• “Birds of a feather flock together”
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12. Personality Traits
• People often do not identify these traits
because they are guarded or not consciously
recognized
• Consumer innovators
– Open minded
– Perceive less risk in trying new things
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13. Lifestyles
• Psychographics
• Includes activities,
interests, and
opinions
• They explain buyer’s
purchase decisions
and choices
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14. Socio-Cultural Values and Beliefs
• Sociological = group
• Anthropological = cultural
• Include segments based on
– Cultural values
– Sub-cultural membership
– Cross-cultural affiliations
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15. Consumption-Specific
Segmentation Bases
Usage rate
Usage situation
Benefit segmentation
Perceived brand
loyalty
Brand relationship
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16. Consumption-Specific Segmentation
Usage-Behavior
• Usage rate
– Awareness status
– Level of involvement
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17. Consumption-Specific Segmentation
Usage-Behavior
• Usage-situation segmentation
– Segmenting on the basis of special occasions or
situations
– Example : When I’m away on business, I try to
stay at a suites hotel.
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18. Which Consumption-Related
Segmentation Is Featured in This Ad?
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19. This is an Example of a Situational
Special Usage Segmentation.
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20. Benefits Segmentation
• Benefits sought represent consumer needs
• Important for positioning
• Benefits of media
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21. Brand Loyalty and Relationships
• Brand loyalty includes:
– Behavior
– Attitude
• Frequency award programs are popular
• Customer relationships can be active or passive
• Retail customers seek:
– Personal connections vs. functional features
• Banking customers seek:
– Special treatment
– Confidence benefits
– Social benefits
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22. Implementing Segmentation Strategies
• Micro- and behavioral targeting
– Personalized advertising messages
– Narrowcasting
• Email
• Mobile
– Use of many data sources
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23. Implementing Segmentation Strategies
• Concentrated Marketing
– One segment
• Differentiated
– Several segments with individual marketing mixes
• Countersegmentation
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24. All rights reserved. No part of this publication may be reproduced, stored in a
retrieval system, or transmitted, in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise, without the prior written
permission of the publisher. Printed in the United States of America.
Copyright © 2010 Pearson Education, Inc. Publishing as
Prentice Hall
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