Market Segmentation Chapter 8

Source: http://www. b2binternational.com Market Segmentation What is it? Segments should Have common needs Respond similarly to a marketing action Product differentiation Market-product grid Product differentiation- Make product seem different from others. AND selling more than 2 products with different features to different market segments MP grid- A framework to relate the segments of a market to products offered or potential marketing actions by the firm. Source: http://www. b2binternational.com

Market Segmentation Segmentation Criteria Substantiality Identifiability Accessibility Responsiveness

Potential Buyers into Segments Ways to Divide the Market Region Age/ household size Lifestyle Benefits sought Usage rate 80/20 rule 80/20 rule- 80 percent of a firm’s sales come from 20 percent of its customers Wendy’s example in the book

Bases for Consumer Segmentation Geographic segmentation Demographic segmentation Age segmentation Tweens Generation Y Generation X Baby Boomers

Bases for Consumer Segmentation Demographic segmentation (cont’d) Gender segmentation Men Women Income segmentation Why used? Ethnic segmentation Ramifications Family life cycle segmentation Increasing role of single adults Source: http://hashtagsocialmedia.com

Bases for Consumer Segmentation Psychographic segmentation Personality Motives Lifestyles Geodemographics Claritas PRIZM Benefit segmentation Snack food market Usage rate segmentation 80/20 rule

Bases for Organizational Segmentation Company characteristics Geography Industry (NAICS) Size Product use Buying process What are they looking for? Optimizers v. satisficers

Strategies to Select Target Market Undifferentiated targeting One marketing mix for entire market Concentrated targeting One particular segment Multisegment targeting Wal-mart Brand aspirationalists, price sensitive affluents, value price shoppers One-to-one marketing Individualized 1Product, multiple- Place and promotion are additional costs Better meets customer needs, doesn’t reduce quality or increase costs, and adds to revenue and profits BTO-Dell

Source: http://mergevisual.blogspot.com Positioning Product differentiation Perceptual map Repositioning Wal-mart Mountain Dew Wendy’s- As age of HH head increases, eating out decreases. So target the younger market. Product positioning- The place an offering occupies in consumers’ minds on important attributes relative to competitive offerings Perceptual map- Based on evaluations of important attributes, judgments of brands on these attributes, and ratings of “ideal” brand. Repositioning- Changing the place an offering occupies in a consumer’s mind relative to other offerings. Source: http://mergevisual.blogspot.com