1 / 22

Market Segmentation

Marketing Segmentation, Post Hoc Segmentation, Priori Segmentation, Benefit Segmentation, Psychographic Segmentation, Vertical Dimension, Horizontal Dimension, Geodemographic Segmentation, Positioning Map, Marketing Mix. Chapter 5. Market Segmentation. Key Terms.

lenora
Download Presentation

Market Segmentation

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Marketing Segmentation, Post Hoc Segmentation, Priori Segmentation, Benefit Segmentation, Psychographic Segmentation, Vertical Dimension, Horizontal Dimension, Geodemographic Segmentation, Positioning Map, Marketing Mix Chapter 5 Market Segmentation Key Terms

  2. Understanding Market Segmentation • Based on the idea that a single product item can seldom meet the needs and wants of all consumers • Viable market – One that can be profitably served by a firm • Market segmentation can be defined as the process of dividing a market into groups of similar consumers and selecting the most appropriate group(s) for the firm to serve • Target market – Group or market segment that a company selects to focus on

  3. Understanding Market Segmentation A Model of the Market Segmentation Process

  4. Understanding Market Segmentation • Delineate the firm’s current situation • Intended to be a reminder of tasks to be performed prior to marketing planning • Determine consumer needs and wants • Successful marketing strategies depend on meeting consumer needs and wants • Industry within which firm operates specifies boundaries of firm’s need satisfaction activities • At a strategic level, need and wants usually are translated into more operational concepts

  5. Dimensions for Market Division • Three important questions to be considered are • Should the segmentation be a priori or a post hoc? • How does one determine the relevant dimensions or bases to use for segmentation? • What are some bases for segmenting consumer and organizational buyer markets?

  6. A Priori versus Post HocSegmentation • A priori segmentation – An approach where the marketing manager has decided on the appropriate basis for segmentation in advance of doing any research on a market • Post hoc segmentation – An approach in which people are grouped into segments on the basis of research findings

  7. Relevance of Segmentation Dimensions • At least some initial dimensions can be determined from • Previous research • Purchase trends • Managerial judgment • Consideration and research of sought benefits are a strongly recommended approach

  8. Bases for Segmentation Useful Segmentation Bases for Consumer Markets

  9. Bases for Segmentation Useful Segmentation Bases for Consumer Markets

  10. Bases for Segmentation Useful Segmentation Bases for Organizational Buyer Markets

  11. Bases for Segmentation • Benefit segmentation – Focuses on benefits sought by consumers • Is a market-oriented approach • Psychographic segmentation – Focuses on consumer lifestyles • Lifestyles are measured on the bases of activities, interests and opinions (AIO) of consumers • Best-known type of segmentation is VALSTM (“values and lifestyles”) • Product of SRI Consulting Business Intelligence

  12. Bases for Segmentation VALS™ Framework and Segments

  13. Bases for Segmentation Toothpaste Market Benefit Segments

  14. Bases for Segmentation • Geodemographic Segmentation – Identifies specific households in a market by focusing on local neighborhood geography • PRIZM NE – Potential Ranking Index by ZIP Markets – New Evolution • Assumes that consumers in particular neighborhoods are similar in many respects and that the best prospects are those who actually use a product • Classifies every U.S. neighborhood into a total of 66 distinct segments

  15. Develop Product Positioning • Positioning can be achieved through any one of these strategies • Superiority to competitive products on one or more product attributes • Positioned by use or application • Positioned in terms of particular types of users • Positioned relative to a product class • Positioned directly against particular competitors • Position mapping – Visual depiction of customer perceptions of competitive products, brands, or models

  16. Positioning Map for Automobiles

  17. Market Segmentation Strategies • Firm may decide to do the following • Not to enter the market • To segment but to be a mass marketer • Market is so small that it is not profitable to market to one portion of it • Heavy users comprise such a large proportion of sales that they are the only relevant target • Product is a dominant brand, and targeting to a few segments is not beneficial • To market to one segment • To market to more than one segment and design a separate marketing mix for each

  18. Market Segmentation Strategies • Criteria to base a firm’s segmentation strategy decisions are • Measurable – Firm must be capable of measuring its size and characteristics • Meaningful – Large enough to deliver sufficient sales and growth potential • Marketable – Can be reached and served in an efficient manner

  19. Market Segmentation Strategies Selecting Target Markets: Some Questions Marketing Managers Should Answer

  20. Market Segmentation Strategies Selecting Target Markets: Some Questions Marketing Managers Should Answer

  21. Design Marketing Mix Strategy • Selection of target market and designing the market should go hand in hand • Marketing mix decisions should have already been carefully considered • Product positioning has many implications for promotion and channel distribution

More Related