Identifying Market Segments and Selecting Target Markets

Identifying Market Segments and Selecting Target Markets

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  Chapter 9 IdentifyingMarket Segments and Selecting Target Markets PowerPoint by Karen E. James Louisiana State University - Shreveport
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  Objectives Learn howcompanies identify the segments that make up a market. Understand the criteria companies use to choose the most attractive market segments.
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  Target Marketing Targetmarketing 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.
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  Using Market SegmentationMass marketing is losing popularity Micromarketing can be undertaken at four levels: Segment marketing Niche marketing Local marketing Individual marketing
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  Using Market SegmentationThree patterns of preference segments are typically identified: Homogeneous preferences Diffused preferences Clustered preferences
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  Using Market SegmentationNeeds-based segmentation Segment identification Segment attractiveness Segment profitability Segment positioning Segment “acid test” Marketing-mix strategy Needs-based Segmentation Process
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  Using Market SegmentationUseful market segments share certain characteristics: Measurable Substantial Accessible Differentiable Actionable
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  Segmenting Consumer MarketsBases for Segmentation Geographic Demographic Psychographic Behavioral Nation or country State or region City or metro size Density Climate
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  Segmenting Consumer MarketsBases for Segmentation Geographic Demographic Psychographic Behavioral Age, race, gender Income, education Family size Family life cycle Occupation Religion, nationality Generation Social class
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  Segmenting Consumer MarketsBases for Segmentation Geographic Demographic Psychographic Behavioral Lifestyle Activities Interests Opinions Personality Core values
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  Segmenting Consumer MarketsBases for Segmentation Geographic Demographic Psychographic Behavioral Occasions Benefits User status Usage rate Loyalty status Buyer-readiness Attitude
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  Segmenting Consumer MarketsMulti-attribute segmentation via geoclustering combines multiple variables to identify smaller, better-defined target groups PRIZM Geoclustering system uses demographic, geographic, lifestyle, and behavioral characteristics
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  Segmenting Business MarketsOperating variables Purchasing approaches Situational factors Personal characteristics Bases for Segmentation Demographic variables
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  Segmenting Business MarketsRackman 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
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  Market Targeting StrategiesEvaluating 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.
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  Market Targeting StrategiesSingle-segment concentration Selective specialization Product specialization Market specialization Patterns of Target Market Selection Full market coverage
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  Market Targeting StrategiesTargeting multiple segments may result in cost economies Supersegment targeting may be appropriate Blocked markets often require megamarketing countermeasures Be aware of ethical concerns