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Week 11

The document discusses market segmentation and targeting. It defines market segmentation as dividing customers into groups based on characteristics that respond similarly to marketing strategies. Effective segmentation is differentiable, measurable, profitable, accessible and actionable. The document also discusses segmentation bases, criteria for evaluating target segments, and targeting strategies.

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deklerkkimberey45
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13 views19 pages

Week 11

The document discusses market segmentation and targeting. It defines market segmentation as dividing customers into groups based on characteristics that respond similarly to marketing strategies. Effective segmentation is differentiable, measurable, profitable, accessible and actionable. The document also discusses segmentation bases, criteria for evaluating target segments, and targeting strategies.

Uploaded by

deklerkkimberey45
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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WEEK11

Market segmentation

• The process of dividing market customers into


groups or segments based on different
characteristics.
• The segments created are composed of
consumers who will respond similarly to
marketing strategies and share similar interests
or needs.
• By carrying out market segmentation companies
are able to develop products and services that are
appropriate for particular target segments.
Market segmentation

Market segment
• group of consumers who respond in a similar
way to a given set of marketing efforts.

Market targeting(targeting)
• evaluating each market segment’s
attractiveness and selecting one or more
segments to enter/serve.
WHY segmentation?

• Consumers differ in one or more ways

• Different consumers require different


marketing tools

• Organizational resources are limited


Criteria for effective segmentation

Measurability
Differentiabillity

Actionable Profitability

Accessibility
Criteria for effective segmentation
DIFFERENTIABLE
• Market segments should be internally homogenous and externally
heterogeneous.
• Differentiability of segments helps the company to tailor marketing strategies
for different groups of consumers which is the essence of Market
segmentation.
MEASURABLE
• Market segments are usually measured in terms of sales or Volume.
• Knowing the size of the market helps the company decides on the different
marketing strategies it can use for a particular segment and also decide on the
intensity of the marketing.
PROFITABLE
• A market segment should be large enough to be worth pursuing as the main
objective of a company is to make a profit.
Criteria for effective segmentation

ACCESSIBILITY
• Demarcated segments must be accessible and the
means of access should fall within the strengths
and abilities of the company ‘ s marketing team.

ACTIONABLE
• The company should have sufficient finance,
relevant personnel and the capability to market
products in a segment.
Benefits of segmentation

• Companies are able to clearly


determine market opportunities that
are available for action.
• Enable adjustments in marketing
programmes
• Helps in designing appropriate
product
• Allows for coordinated timing of
marketing efforts
• Enables efficient use of resources
• Better service to customers
Segmentation bases
Segmentation bases
Behavioural segmentation
• Based on what people actually do with the product or with related
products.
• Based on knowledge, attitudes, uses, responses. Includes:
• Benefits sought e.g. convenience, status, performance?
• Purchase occasion-when they get the idea to purchase or use the
purchased item? special events?
• Purchase behaviour-brand loyal, switching, innovators
• Usage rate-heavy, medium, light and non-users
• User status-non-users, ex-users, first-time, potential, regular
Segmentation bases
Geographic segmentation
• Based on country, region, province, city , any other location
Demographic segmentation
• Based on age, gender, education, family size, occupation
• Can also be based on socio-cultural factors such as culture,
religion, social class
Psychographic segmentation
• Based on lifestyle (social class, interest, activities, opinions,
trendsetters) and personality (independent, impulsive, self
confident)
Market targeting (Targeting)

• A firm must now choose a segment to serve


• The choice of which and how many market
segments the company will compete in.
Factors to consider when evaluating
target market segments
Segment size and Resources
• Right size and growth, Largest and Fast-growing
segments not always attractive
Segment structural attractiveness
• Structural factors that affect long term segment
attractiveness.
• Aggressive competition, New entrants, Substitutes
products, Bargaining power of buyers, Powerful
suppliers
Organizational objectives & policies
• Company long term objectives
Market targeting strategies

Undifferentiated (Mass marketing)


• mass production, distribution, promotion of one product for all buyers.
• Focuses on what is common amongst segments than what is
different
Differentiated (Segmented marketing)
• Aims to serve several segments with tailored offers for each
• Results in low competition and efficient use of resources
Concentrated (Niche) - focus on small subgroups within larger
segments and produce carefully targeted products. Low cost and low
competition
Micro marketing - tailoring products to suit specific individuals and
circumstances

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