Segments and Selecting Chapter 9 Identifying Market Segments and Selecting Target Markets Marketing Management Tenth Edition Philip Kotler

Objectives Identifying Market Segments Choosing Target Markets

Steps in Market Segmentation, Targeting,and Positioning 1. Identify segmentation variables and segment the market 2. Develop profiles of resulting segments Market Segmentation 3. Evaluate attractiveness of each segment 4. Select the target segment(s) Market Targeting 5. Identify possible positioning concepts for each target segment 6. Select, develop, and communicate the chosen concept Market Positioning

Basic Market-Preference Patterns (a) Homogeneous preferences Sweetness Creaminess (b) Diffused preferences Creaminess Sweetness (c) Clustered preferences Creaminess Sweetness

Market-Segmentation Procedure Survey Motivations Attitudes Behavior Analysis Factors Clusters Profiling

Bases for Segmenting Consumer Markets Geographic Region, City or Metro Size, Density, Climate Demographic Age, Gender, Family size and Fife cycle, Race, Occupation, or Income ... Lifestyle or Personality Psychographic Occasions, Benefits, Uses, or Attitudes Behavioral

Bases for Segmenting Business Markets Demographic Operating Variables Purchasing Approaches Situational Factors Personal Characteristics

Effective Segmentation Measurable Effective Segmentation Substantial Size, purchasing power, profiles of segments can be measured. Accessible Segments must be large or profitable enough to serve. Differential Segments can be effectively reached and served. Actionable Segments must respond differently to different marketing mix elements & actions. Must be able to attract and serve the segments.

Heavy and Light Users of Common Consumer Products HEAVY HALF LIGHT HALF PRODUCT (% USERS) 75% 71% Soups and detergents (94%) 25% 29% 79% 21% Toilet tissue (95%) Shampoo (94%) 75% 25% 17% Paper towels (90%) Cake mix (74%) Cola (67%) 83% 13% 5% 87% 19% Beer (41%) Dog food (30%) Bourbon (20%) 81% 95%

Additional Segmentation Criteria Ethical Choice of Market Targets Segment Interrelationships & Supersegments Segment-by-Segment Invasion Plans Intersegment Cooperation

Five Patterns of Target Market Selection Single-segment concentration Selective specialization M1 M2 M3 P1 P2 P3 Product specialization M1 M2 M3 P1 P2 P3 P1 P2 P3 M1 M2 M3 P = Product M = Market Market specialization M1 M2 M3 P1 P2 P3 M1 M2 M3 Full market coverage P1 P2 P3

Segment-by-Segment Invasion Plan Customer Groups Truckers Railroads Airlines Company B Company C Company A Large computers Product Varieties Personal Mid-size