Today’s Objectives Learn how to choose a segment as your target market. Explore the types of target marketing, who uses them and pros / cons.

Selecting Target Market Segments A target market consists of a set of buyers who share common needs or characteristics that the company decides to serve.

Market Targeting Evaluating Target Segments Segment size and growth Segment structural attractiveness Company objectives and resources

Structural Attractiveness Competition for that segment today. Power of intermediaries (distribution). Market power of that segment – do they have a lot of alternatives? Example: selling to Amazon customers

Activity Select a target segment for a women’s shoe store based on U.S. Census data: US Census

Target Marketing Strategies Notes to Accompany Slide: Undifferentiated (mass) marketing: A market-coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer. Differentiated (segmented) marketing: A market-coverage strategy in which a firm decides to target several market segments and designs separate offers for each. Concentrated (niche) marketing: A market-coverage strategy in which a firm goes after a large share of one or a few segments or niches.

Mass Marketing Undifferentiated (mass) marketing: A market-coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer.

Segmented Marketing Differentiated (segmented) marketing: A market-coverage strategy in which a firm decides to target several market segments and designs separate offers for each.

Niche Marketing Concentrated (niche) marketing: A market-coverage strategy in which a firm goes after a large share of one or a few segments or niches.

Micro Marketing Tailoring products and marketing programs to the needs and wants of specific individuals and local customer segments

Target Marketing Examples Mass Market Segmented Marketing Niche Marketing Individual /Local Marketing

Do Now – P1 Re-Open: Class Notes – Target Marketing and Differentiation. Write the pros and cons of a strategy: Row 1 - Mass Row 2 - Segmented Row 3 - Niche Row 4 – Micro Row 5 – Wildcard! Pick one.

Pros & Cons Pros Cons Mass High volume No differentiation leads to low prices and low profits. Segmented Differentiated. Lose focus, spread resources too widely. Niche Less competition. Insufficient volume. Micro Maximum differentiation Low volume, high cost.

Check Your Understanding Edmodo: Take Target Marketing Quiz v2

Do Now – P-6 Edmodo: Take Target Marketing Quiz v2

Get Ready to Take Notes Open – Exercise and Notes – Target Marketing and Differentiation.

Objectives Why does differentiation matter? How do marketers differentiate?

Differentiation Process of distinguishing a product or service from others, to make it more attractive to a particular target market. This involves differentiating it from competitors' products as well as a firm's own products.

Al Ries on Being Different Better vs. Different - YouTube

Differentiation Product Services Channels People Image

5 Ways to Differentiate Example Product? Experience as well as physical product. Services? How is product delivered? Channels? Where/how you get the product. People? Who delivers the product. Image? What the product represents.

Activity Partners Pick a consumer product (besides coffee) Create an ad that differentiates the product using at least three of the five ways. Put into a power point that you can share. SAVE as Project – Differentiation - names

Marketing Strategy Takeaways Strategy = target market + value prop Strategy vs. tactics Process = segment, target and position. Successful strategy: Different target market, or… Different value prop. Difficult to copy or respond. 5 ways to differentiate value prop.

Summary – Target Market & Differentiation Selection: size, growth and structural attractiveness (competition). Targeting Strategy: mass, segmented, niche, or individual. Differentiation: product, service, channel, people, image.