Presentation on Identifying Market Segments and Targets

What Market Segmentation MeansMarket Segmentation  Market segments Market segments  Product differentiation Product differentiation Segmentation: Linking Needs to Action WHY SEGMENT MARKETS?

Market segmentation links market needs to an organization’s marketing program

What Market Segmentation Means (cont)Market Segmentation How Reebok’s Segmentation Strategy Developed WHY SEGMENT MARKETS?

Reebok market-product grid showing how different shoes reach segments of customers with different needs

What Market Segmentation MeansMarket Segmentation Using Market-Product GridsMarket-Product Grids WHY SEGMENT MARKETS?

When to Segment Markets One Product and Multiple Market Segments Multiple Products and Multiple Market Segments Segments of One: Mass Customization The Segmentation Trade Off: CRM versus synergies synergies WHY SEGMENT MARKETS?

STEPS IN SEGMENTING AND TARGETING MARKETS

Form Prospective Buyers into Segments Criteria to Use in Forming the Segments  Potential for increased profit and ROI  Similarity of needs of potential buyers in a segment  Difference of needs of buyers among segments  Feasibility of a marketing action reaching segment  Simplicity and cost of assigning buyers to markets STEPS IN SEGMENTING AND TARGETING MARKETS

Segmentation variables and breakdowns for U.S. consumer markets

 Ways to Segment Consumer Markets  Usage rate Usage rate  80/20 rule 80/20 rule STEPS IN SEGMENTING AND TARGETING MARKETS

Comparison of various kinds of users and nonusers for Wendy’s, Burger King, and McDonald’s restaurants

Fast-Food Patronage: Simmons Fall 2001 National Consumer Survey

Segmentation variables and breakdowns for U.S. organizational markets

Form Products to Be Sold into Groups Develop a Market-Product Grid and Estimate Size of Markets STEPS IN SEGMENTING AND TARGETING MARKETS

Select Target Markets Criteria to Use in Picking the Target Segments  Market size  Expected growth  Competitive position  Cost of reaching the segment  Compatibility with objectives and resources Choose the Segments STEPS IN SEGMENTING AND TARGETING MARKETS

Take Marketing Actions to Reach Target Markets STEPS IN SEGMENTING AND TARGETING MARKETS

Two Approaches to Product PositioningProduct Positioning  Head-to-head positioning  Differentiation positioning POSITIONING THE PRODUCT

Product Positioning Using Perceptual MapsPerceptual Maps  Evaluations of important attributes for a product class  Judgments of existing brands with the important attributes  Ratings of an ideal brand’s attributes POSITIONING THE PRODUCT

Aggregating prospective buyers into groups, or segments, that (1) have common needs and (2) will respond similarly to a marketing action. Market Segmentation

The groups that result from the process of market segmentation; these groups ideally (1) have common needs and (2) will respond similarly to a marketing action. Market Segments

A strategy with two different but related meanings. Its broadest meaning involves a firm’s using different marketing mix activities to help consumers perceive the product as being different and better than competing products. Its narrower meaning involves a firm’s selling two or more products with different features targeted to different market segments. Product Differentiation

Framework to relate the segment of a market to products offered or potential marketing actions by the firm. Market-Product Grid

The increased customer value achieved through performing organizational functions more efficiently. Synergy

Quantity consumed or patronage—store visits—during a specific period, varies significantly among different customer groups. Usage Rate

A concept that suggests 80 percent of a firm’s sales are obtained from 20 percent of its customers. 80/20 Rule

Method of presenting an relating data having two or more variables to analyze and discover relationships in the data. Cross-Tabulations

The place an offering occupies in consumers’ minds on important attributes relative to competitive offerings. Product Positioning

A means of displaying or graphing in two dimensions the location of products or brands in the minds of consumers. Perceptual Map

Changing the place a product occupies in a consumer’ mind relative to competitive products. Repositioning