MARKETING MANAGEMENT 12th edition 8 Identifying Market Segments and Targets Kotler Keller

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.

Ford’s Model T Followed a Mass Market Approach

Steps in Market Segmentation, Targeting, and Positioning 1. Identify bases for segmenting the market 2. Develop segment profiles Market Targeting 3. Develop measure of segment attractiveness 4. Select target segments Market positioning 5. Develop positioning for target segments 6. Develop a marketing mix for each segment

Four levels of Micromarketing Segments Niches Local areas Individuals

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

Figure 8.1 Basic Market Preference Patterns

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.

Figure 8.2 Examples of Market Customization

Segmenting Consumer Markets Geographic Demographic Psychographic Behavioral

Demographic Segmentation Age and Life Cycle Life Stage Gender Income Generation Social Class

Figure 8.4 The VALS Segmentation System

Behavioral Segmentation Decision Roles Initiator Influencer Decider Buyer User Behavioral Variables Occasions Benefits User Status Usage Rate Buyer-Readiness Loyalty Status Attitude

Figure 8.5 Behavioral Segmentation Breakdown

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

Effective Segmentation Criteria 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 Differential Actionable Segments must respond differently to different marketing mix elements & programs. Effective programs can be designed to attract and serve the segments.

Market Targeting Evaluating Market Segments Segment Size and Growth Analyze current sales, growth rates and expected profitability for various segments. Segment Structural Attractiveness Consider effects of: competitors, availability of substitute products and, the power of buyers & suppliers. Company Objectives and Resources Company skills & resources needed to succeed in that segment(s). Look for Competitive Advantages.

Market Targeting Market Coverage Strategies Company Marketing Mix Market Company Marketing Mix 1 Segment 1 Company Marketing Mix 2 Segment 2 A. Undifferentiated Marketing Company Marketing Mix 3 Segment 3 Segment 1 Company Marketing Mix Segment 2 B. Differentiated Marketing Segment 3 C. Concentrated Marketing

Figure 8.6 Patterns of Target Market Selection

Figure 8.6 Patterns of Target Market Selection

Figure 8.6 Patterns of Target Market Selection