1 Session 6 Market Segmentation, Targeting, and Positioning

Markets A market is all actual and potential buyers of a product or service ©

Stages of Marketing Mass marketing Product-variety marketing Target marketing Micromarketing Customized marketing

Stages of Marketing Mass marketing – seller mass produces, mass distributes, and mass promotes one product to all buyers. The appeal, is that is should lead to the lowest cost prices and create the largest potential market Product-variety marketing – seller produces two or more products and services that have different features, styles, quality, and size. The argument is that, consumers have different tastes that vary over time. ex. Mc Do hamburgers

Stages of Marketing Target marketing – identifies market segments, selects one or more, and develops products and services tailored to each one selected segment Micro-marketing – serves as tactic to reach multi-market segments such as use of database marketing to reach small segments with individualised needs. Ex hospitals and tourism

Stages of Marketing Customised marketing – is a from of micro marketing by offering a frequent guest the ultimate forms of target marketing

Geographic Segmentation Dividing the market into different geographic units Nations States Regions Counties Cities Neighborhoods

Demographic Segmentation Dividing the market into groups based on demographic variables Age Gender Income Occupation

Psychographic Segmentation Dividing buyers into different groups based on social class, lifestyle, and personality characteristics

Behavior Segmentation Buyers are divided into groups based on their knowledge, attitude, and use or response to a product The best starting point for building market segments Types Special occasion segmentation Benefits sought User status Usage rate Loyalty status Buyer readiness stage

Requirements for Effective Segmentation Measurability Accessibility Substantiality Actionability ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens

Size, purchasing power, profiles of segments can be measured. Segments can be effectively reached and served. Segments are large or profitable enough to serve. Measurable Accessible Substantial Actionable Effective programs can be designed to attract and serve the segments. Requirements for Effective Segmentation

Activity Go to the website of a major brand of hospitality or travel company that targets a specific segment, such as children, young adults, seniors, upper- income customers. Explain how they use appeal to different segments through the website.

Evaluating market segments

Segment size and growth Segment structural attractiveness Company objectives and resources

Activity Group the students Visit the city and evaluate the market segments from various sectors of the industry Travel agency Library Bookstore Takeaway shop Hotel Shopping centre

Activity Students will be given I hour to conduct this activity Present in class