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Chapter 9. Identifying Market Segments and Selecting Target Markets. PowerPoint by Karen E. James Louisiana State University - Shreveport. Objectives. Learn how companies identify the segments that make up a market.

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chapter 9

Chapter 9

Identifying Market Segments and Selecting Target Markets

PowerPoint by Karen E. James

Louisiana State University - Shreveport

To accompany A Framework for Marketing Management, 2nd Edition

objectives
Objectives
  • Learn how companies identify the segments that make up a market.
  • Understand the criteria companies use to choose the most attractive market segments.

To accompany A Framework for Marketing Management, 2nd Edition

target marketing
Target Marketing
  • Target marketing requires marketers to take three major steps:
    • Market segmentation: Identifying and profiling distinct groups of buyers who differ in their needs and preferences.
    • Market targeting: Selecting one or more market segments to enter.
    • Market positioning: Establishing and communicating the key distinctive benefit(s) of the company’s market offering to each target.

To accompany A Framework for Marketing Management, 2nd Edition

using market segmentation
Using Market Segmentation
  • Mass marketing is losing popularity
  • Micromarketing can be undertaken at four levels:
    • Segment marketing
    • Niche marketing
    • Local marketing
    • Individual marketing

To accompany A Framework for Marketing Management, 2nd Edition

using market segmentation1
Using Market Segmentation
  • Three patterns of preference segments are typically identified:
    • Homogeneous preferences
    • Diffused preferences
    • Clustered preferences

To accompany A Framework for Marketing Management, 2nd Edition

using market segmentation2
Needs-based segmentation

Segment identification

Segment attractiveness

Segment profitability

Segment positioning

Segment “acid test”

Using Market Segmentation

Needs-based Segmentation Process

  • Marketing-mix strategy

To accompany A Framework for Marketing Management, 2nd Edition

using market segmentation3
Using Market Segmentation
  • Useful market segments share certain characteristics:
    • Measurable
    • Substantial
    • Accessible
    • Differentiable
    • Actionable

To accompany A Framework for Marketing Management, 2nd Edition

segmenting consumer markets
Bases for Segmentation

Geographic

Demographic

Psychographic

Behavioral

Nation or country

State or region

City or metro size

Density

Climate

Segmenting Consumer Markets

To accompany A Framework for Marketing Management, 2nd Edition

segmenting consumer markets1
Bases for Segmentation

Geographic

Demographic

Psychographic

Behavioral

Age, race, gender

Income, education

Family size

Family life cycle

Occupation

Religion, nationality

Generation

Social class

Segmenting Consumer Markets

To accompany A Framework for Marketing Management, 2nd Edition

segmenting consumer markets2
Bases for Segmentation

Geographic

Demographic

Psychographic

Behavioral

Lifestyle

Activities

Interests

Opinions

Personality

Core values

Segmenting Consumer Markets

To accompany A Framework for Marketing Management, 2nd Edition

segmenting consumer markets3
Bases for Segmentation

Geographic

Demographic

Psychographic

Behavioral

Occasions

Benefits

User status

Usage rate

Loyalty status

Buyer-readiness

Attitude

Segmenting Consumer Markets

To accompany A Framework for Marketing Management, 2nd Edition

segmenting consumer markets4
Segmenting Consumer Markets
  • 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

To accompany A Framework for Marketing Management, 2nd Edition

segmenting business markets
Operating variables

Purchasing approaches

Situational factors

Personal characteristics

Segmenting Business Markets

Bases for Segmentation

  • Demographic variables

To accompany A Framework for Marketing Management, 2nd Edition

segmenting business markets1
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

To accompany A Framework for Marketing Management, 2nd Edition

market targeting strategies
Market Targeting Strategies
  • Evaluating and selecting market segments requires assessing the segment’s overall attractiveness in light of company’s objectives and resources.
  • Five patterns of target market selection can then be considered.

To accompany A Framework for Marketing Management, 2nd Edition

market targeting strategies1
Single-segment concentration

Selective specialization

Product specialization

Market specialization

Market Targeting Strategies

Patterns of Target Market Selection

  • Full market coverage

To accompany A Framework for Marketing Management, 2nd Edition

market targeting strategies2
Market Targeting Strategies
  • Targeting multiple segments may result in cost economies
  • Supersegment targeting may be appropriate
  • Blocked markets often require megamarketing countermeasures
  • Be aware of ethical concerns

To accompany A Framework for Marketing Management, 2nd Edition