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Market Segmentation, Targeting and Positioning

Market Segmentation, Targeting and Positioning. Chapter 10. What is a market segment?. A group of customers within the same general market who are defined by: Differences from other groups Similarities within the group regarding wants, buying preferences, or buying behavior. Target Market.

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Market Segmentation, Targeting and Positioning

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  1. Market Segmentation, Targeting and Positioning Chapter 10

  2. What is a market segment? • A group of customers within the same general market who are defined by: • Differences from other groups • Similarities within the group regarding wants, buying preferences, or buying behavior

  3. Target Market • The specific market segment for which the marketer designs a particular marketing mix

  4. Market segmentation • The process of dividing the total market for a good or service into smaller, internally homogeneous groups

  5. Benefits of market segmentation • Small firms- allocate resources to specifically defined and selected markets • Medium firms- rapid growth • Large firms- reach fragmented groups

  6. Process of segmentation • Identify current and potential wants within the market • Identify characteristics that distinguish among the segments • Determine the size of segments and how well they are being served

  7. Characteristics of good market segments • Differences in consumers • Similarities within the segment • Measurable attributes • Large enough • Accessible

  8. Limitations of segmentation • “Too small” segments • Misread differences and similarities • Cost inefficient • Too many spin-offs • Short term vs. long-term orientation • Unable to use certain media • Firms compete in too many segments • Confuse people • Products get locked in a declining segment • Slow to seek innovative possibilities

  9. The first cut: • Ultimate vs. Business consumers

  10. Consumer markets • Geographic segmentation • Demographic segmentation • Psychographic segmentation • Behavioral segmentation • Benefits desired • Usage rate

  11. Geographic segmentation • Regional distribution • City or metro size • Urban, suburban, rural • Climate • Trends • Global marketing • Micromarketing

  12. Demographic segmentation • Income/education level • Age • Age effects • Cohort effects • Gender • Family life cycle • Occupation • Ethnicity/race

  13. Psychographic segmentation • Personality • Lifestyle • VALS • Attitudes • Opinions

  14. Behavioral segmentation • Benefits desired • Usage rate

  15. Segmenting business markets • Customer location • Customer type • Size • Organization structure • Purchase criteria • Transaction conditions • Buying situation • Usage rate • Purchase procedure

  16. Target market Strategy • Analyze demand • Homogeneous • Clustered • Diffused • Aggregation strategy • Single segment strategy • Multiple segment strategy

  17. Forecasting market demand • Quantitative methods • Qualitative methods

  18. Basic forecasting terms • Market share • Market factor • Market potential • Sales potential • Sales forecast

  19. Forecasting sales • Table 10-3

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