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(Chapter 9) Identifying Market Segments and Selecting Target Markets. A single product can seldom meet the needs and desires of ___________________ Consumers are too numerous and diverse in their buying requirements. Using Market Segmentation (p. 171).
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A single product can seldom meet the needs and desires of ___________________
Consumers are too numerous and diverse in their buying requirements
Markets can be targeted at four levels: segments, niches, local areas, and individuals
Market segment: large, groups within a market
: a more narrowly defined group seeking a distinctive mix of benefits; has size, profits, and growth potential
Distinct set of needs
Willing to pay premium
Needs and wants of local customer groups (e.g., neighborhood, trade areas)
customized marketing; one-to-one marketing
Measurable: the size, purchasing power, and characteristics of the segments can be measured
Substantial: the segments are large and profitable enough to serve; each should be the largest possible homogeneous group worth pursuing with a tailored program
Accessible: The segments can be effectively reached and served
Differentiable: The segments are conceptually distinguishable and respond differently to different market mixes.
Actionable: Effective programs can be formulated for attracting and serving the segments
4. Can we afford to promote to this segment and is there a media to reach them?
Geographic Segmentation: nations, states, regions, counties, etc.
Demographic Segmentation: age, family size, gender, income, etc.
Psychographic Segmentation: lifestyle, personality, values
Behavioral Segmentation: buyers segmented on their knowledge of, attitude toward, use of, or response to a product.
User status: regular user, first time user
Usage rate: light, medium, heavy user
Various segments: decide how many and which ones to target
• What makes the segments attractive?
• Consider company resources and objectives
- able or unable to offer superior value
- company objectives
Single segment concentration: focus on ____ segment m1 m2 m3
p = product offering p1
m = market segment p2
Porsche (p2) – for sports car market ________
Selective specialization: select a of segments; each segment is appealing m1 m2 m3
Truck (p1); economy (p2); luxury (p3);
Product specialization: specialize in making a certain product for __________________ segments
m1 m2 m3
Market specialization: serve many needs of a particular customer group
m1 m2 m3
Microscope (p1); test tubes (p2); chemicals (p3)
Full market coverage: serve __customer groups with ______ the products they might need
Ignore segment differences
for different segments
Increased segmentation allows company to meet needs of more customers; increased profitability
Increased segmentation increases costs
Tradeoff: Will increased segmentation _________ for added costs?
Mass customization: prepare individually designed offerings on a mass basis to meet each customer’s requirements