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©2003PrenticeHall,Inc.ToaccompanyAFrameworkforMarketingManagement,2ndEditionSlide0inChapter9Chapter9IdentifyingMarketSegmentsandSelectingTargetMarketsPowerPointbyKarenE.JamesLouisianaStateUniversity-Shreveport©2003PrenticeHall,Inc.ToaccompanyAFrameworkforMarketingManagement,2ndEditionSlide1inChapter9ObjectivesLearnhowcompaniesidentifythesegmentsthatmakeupamarket.Understandthecriteriacompaniesusetochoosethemostattractivemarketsegments.©2003PrenticeHall,Inc.ToaccompanyAFrameworkforMarketingManagement,2ndEditionSlide2inChapter9TargetMarketingTargetmarketingrequiresmarketerstotakethreemajorsteps:–Marketsegmentation:Identifyingandprofilingdistinctgroupsofbuyerswhodifferintheirneedsandpreferences.–Markettargeting:Selectingoneormoremarketsegmentstoenter.–Marketpositioning:Establishingandcommunicatingthekeydistinctivebenefit(s)ofthecompany’smarketofferingtoeachtarget.©2003PrenticeHall,Inc.ToaccompanyAFrameworkforMarketingManagement,2ndEditionSlide3inChapter9UsingMarketSegmentationMassmarketingislosingpopularityMicromarketingcanbeundertakenatfourlevels:–Segmentmarketing–Nichemarketing–Localmarketing–Individualmarketing©2003PrenticeHall,Inc.ToaccompanyAFrameworkforMarketingManagement,2ndEditionSlide4inChapter9UsingMarketSegmentationThreepatternsofpreferencesegmentsaretypicallyidentified:–Homogeneouspreferences–Diffusedpreferences–Clusteredpreferences©2003PrenticeHall,Inc.ToaccompanyAFrameworkforMarketingManagement,2ndEditionSlide5inChapter9UsingMarketSegmentationNeeds-basedsegmentationSegmentidentificationSegmentattractivenessSegmentprofitabilitySegmentpositioningSegment“acidtest”Marketing-mixstrategyNeeds-basedSegmentationProcess©2003PrenticeHall,Inc.ToaccompanyAFrameworkforMarketingManagement,2ndEditionSlide6inChapter9UsingMarketSegmentationUsefulmarketsegmentssharecertaincharacteristics:–Measurable–Substantial–Accessible–Differentiable–Actionable©2003PrenticeHall,Inc.ToaccompanyAFrameworkforMarketingManagement,2ndEditionSlide7inChapter9SegmentingConsumerMarketsBasesforSegmentationGeographicDemographicPsychographicBehavioralNationorcountryStateorregionCityormetrosizeDensityClimate©2003PrenticeHall,Inc.ToaccompanyAFrameworkforMarketingManagement,2ndEditionSlide8inChapter9SegmentingConsumerMarketsBasesforSegmentationGeographicDemographicPsychographicBehavioralAge,race,genderIncome,educationFamilysizeFamilylifecycleOccupationReligion,nationalityGenerationSocialclass©2003PrenticeHall,Inc.ToaccompanyAFrameworkforMarketingManagement,2ndEditionSlide9inChapter9SegmentingConsumerMarketsBasesforSegmentationGeographicDemographicPsychographicBehavioralLifestyle–Activities–Interests–OpinionsPersonalityCorevalues©2003PrenticeHall,Inc.ToaccompanyAFrameworkforMarketingManagement,2ndEditionSlide10inChapter9SegmentingConsumerMarketsBasesforSegmentationGeographicDemographicPsychographicBehavioralOccasionsBenefitsUserstatusUsagerateLoyaltystatusBuyer-readinessAttitude©2003PrenticeHall,Inc.ToaccompanyAFrameworkforMarketingManagement,2ndEditionSlide11inChapter9SegmentingConsumerMarketsMulti-attributesegmentationviageoclusteringcombinesmultiplevariablestoidentifysmaller,better-definedtargetgroups–PRIZMGeoclusteringsystemusesdemographic,geographic,lifestyle,andbehavioralcharacteristics©2003PrenticeHall,Inc.ToaccompanyAFrameworkforMarketingManagement,2ndEditionSlide12inChapter9SegmentingBusinessMarketsOperatingvariablesPurchasingapproachesSituationalfactorsPersonalcharacteristicsBasesforSegmentationDemographicvariables©2003PrenticeHall,Inc.ToaccompanyAFrameworkforMarketingManagement,2ndEditionSlide13inChapter9SegmentingBusinessMarketsRackmanandVincentisproposedasegmentationschemethatclassifiesbusinessbuyersintothreegroups:–Price-orientedcustomers:bestservedviatransactionalselling–Solution-orientedcustomers:bestservedbymeansofconsultativeselling–Strategic-valuecustomers:bestservedbymeansofenterpriseselling©2003PrenticeHall,Inc.ToaccompanyAFrameworkforMarketingManagement,2ndEditionSlide14inChapter9MarketTargetingStrategiesEvaluatingandselectingmarketsegmentsrequiresassessingthesegment’soverallattractivenessinlightofcompany’sobjectivesandresources.Fivepatternsoftargetmarketselectioncanthenbeconsidered.©2003PrenticeHall,Inc.ToaccompanyAFrameworkforMarketingManagement,2ndEditionSlide15inChapter9MarketTargetingStrategiesSingle-segmentconcentrationSelectivespecializationProductspecializationMarketspecializationPatternsofTargetMarketSelectionFullmarketcoverage©2003PrenticeHall,Inc.ToaccompanyAFrameworkforMarketingManagement,2ndEditionSlide16inChapter9MarketTargetingStrategiesTargetingmultiplesegmentsmayresultincosteconomiesSupersegmenttargetingmaybeappropriateBlockedmarketsoftenrequiremegamarketingcountermeasuresBeawareofethicalconcerns