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The document discusses market segmentation and targeting strategies in marketing management, highlighting different levels of segmentation, effective targeting requirements, and various methods for segmenting consumer and business markets. It emphasizes the importance of identifying distinct buyer groups, selecting attractive target markets, and ensuring that segments are measurable, substantial, accessible, differentiable, and actionable. Additionally, it covers concepts like customerization, behavioral segmentation, and the long tail theory in marketing.

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5 views

kotler_mm13e_Ch_08

The document discusses market segmentation and targeting strategies in marketing management, highlighting different levels of segmentation, effective targeting requirements, and various methods for segmenting consumer and business markets. It emphasizes the importance of identifying distinct buyer groups, selecting attractive target markets, and ensuring that segments are measurable, substantial, accessible, differentiable, and actionable. Additionally, it covers concepts like customerization, behavioral segmentation, and the long tail theory in marketing.

Uploaded by

shakil131844
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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8

Identifying
Market Segments
and Targets

Marketing Management, 13th ed


Chapter Questions

• What are the different levels of market


segmentation?
• How can a company divide a market
into segments?
• How should a company choose the
most attractive target markets?
• What are the requirements for effective
segmentation?

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-2


Baby Boomers: A Lucrative Market

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-3


Effective Targeting Requires…

• Identify and profile distinct groups of


buyers who differ in their needs and
preferences
• Select one or more market segments to
enter
• Establish and communicate the
distinctive benefits of the market
offering

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-4


Ford’s Model T Followed a Mass
Market Approach

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-5


Four levels of Micromarketing

Segments Niches

Local areas Individuals

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-6


What is a Market Segment?

A market segment consists of a


group of customers who share a
similar set of needs and wants.

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-7


Gather.com: A Niche
Social Networking Site

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-8


Flexible Marketing Offerings

• Naked solution: • Discretionary


Product and service options: Some
elements that all segment members
segment members value options but
value not all

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-9


Preference Segments

• Homogeneous preferences exist


when consumers want the same things
• Diffused preferences exist when
consumers want very different things
• Clustered preferences reveal natural
segments from groups with shared
preferences

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-10


Niche Marketers

Enterprise Rent-A-Car
targets the insurance-
replacement market

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-11


Baskin Robbins Focuses on
Local Marketing

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-12


The Long Tail
• Chris Anderson explains the long tail
equation:
• The lower the cost of distribution, the more
you can economically offer without having
to predict demand;
• The more you can offer, the greater the
chance that you will be able to tap latent
demand for minority tastes; and
• Aggregate enough minority taste, and you
may find a new market.

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-13


What is Customerization?

Customerization combines operationally


driven mass customization with customized
marketing in a way that empowers
consumers to design the product and service
offering of their choice.

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-14


Segmenting Consumer Markets

Geographic

Demographic

Psychographic

Behavioral

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-15


Claritas’ Prizm

• Education and affluence


• Family life cycle
• Urbanization
• Race and ethnicity
• Mobility

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-16


Demographic Segmentation

Age and Life Cycle


Life Stage
Gender
Income
Generation
Social Class

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-17


Toyota Scion
Targets Gen Y Consumers

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-18


Dove Targets Women

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-19


Figure 8.1
The VALS Segmentation System

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-20


Behavioral Segmentation

Decision Roles Behavioral Variables


• Initiator • Occasions
• Influencer • Benefits
• Decider • User Status
• Buyer • Usage Rate
• User • Buyer-Readiness
• Loyalty Status
• Attitude
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-21
The Brand Funnel Illustrates
Variations in the
Buyer-Readiness Stage
• Aware
• Ever tried
• Recent trial
• Occasional user
• Regular user
• Most often used

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-22


Loyalty Status

Hard-core

Split loyals

Shifting loyals

Switchers

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-23


Figure 8.3 Behavioral
Segmentation Breakdown

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-24


The Conversion Model

Convertible Shallow Average Entrenched

Nonuse
Users
rs

Strongly Weakly
Ambivalent Available
unavailable unavailable

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-25


Segmenting for Business Markets

Demographic

Operating Variable

Purchasing Approaches

Situational Factors
Personal
Characteristics

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-26


Steps in Segmentation Process

Needs-based segmentation

Segment identification Marketing-


Mix
Segment attractiveness Strategy

Segment profitability

Segment positioning

Segment acid test


Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-27
Effective Segmentation Criteria

Measurable

Substantial

Accessible

Differentiable

Actionable

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-28


Figure 8.4 Patterns of
Target Market Selection

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-29


Figure 8.4 Patterns of
Target Market Selection

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-30


Figure 8.4 Patterns of
Target Market Selection

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-31


Crest Whitestrips Follows a
Multisegment Strategy

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-32


Figure 8.5 Segment-by-Segment
Invasion Plan

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-33


Pepsi used Megamarketing in India

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-34


Pepsi used Megamarketing in
India

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-35


Marketing Debate

✔ Is mass marketing dead?


Take a position:
1. Mass marketing is dead.
or
2. Mass marketing is still a viable way to build
a profitable brand.

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-36


Marketing Discussion

✔ Think of various product categories.


✔ How would you classify yourself
in terms of the various segmentation
schemes?
✔ How would marketing be more or less
effective for you depending upon the
segment involved?

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-37

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