Identifying Market Segments and Targets Marketing Management, 13 th ed 8

What is so Good about Segmentation ? Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-2

Market Segmentation is not the same thing as Customer Segmentation mmd/UM/Kotler8mmd/August2009

Norway 4-0 Scotland Scotland's World Cup dream was left on a knife edge after they suffered a crushing defeat at the hands of an Egil Olsen-inspired Norway.

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-5 Chapter Questions What are the different levels of market segmentation? How can a company divide a market into segments? How should a company choose the most attractive target markets? What are the requirements for effective segmentation?

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-6 Four levels of Micromarketing Segments Local areasIndividuals Niches

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-7 Segmenting Consumer Markets Geographic Demographic Psychographic Behavioural

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-8 Demographic Segmentation Age and Life Cycle Life Stage Gender Income Generation Social Class

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-9 The VALS Segmentation System

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-10 Behavioural Segmentation Decision Roles Initiator Influencer Decider Buyer User Behavioural Variables Occasions Benefits User Status Usage Rate Buyer-Readiness Loyalty Status Attitude

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-11 The Brand Funnel: Variations in the Buyer-Readiness Stage Aware Ever tried Recent trial Occasional user Regular user Most often used

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-12 Loyalty Status Switchers Shifting loyals Split loyals Hard-core

Behavioural Segmentation

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-14 The Conversion Model ConvertibleShallowAverageEntrenched Strongly unavailable AmbivalentAvailable Weakly unavailable Users Nonusers

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-15 Segmenting for Business Markets Demographic Operating Variable Purchasing Approaches Situational Factors Personal Characteristics Personal Characteristics

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-16 Steps in Segmentation Process Needs-based segmentation Segment identification Segment attractiveness Segment profitability Segment positioning Segment acid test Marketing-Mix Strategy

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-17 Effective Segmentation Criteria Measurable Substantial Accessible Differentiable Actionable

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-18 Figure 8.4 Patterns of Target Market Selection

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-19 Figure 8.4 Patterns of Target Market Selection

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-20 Figure 8.4 Patterns of Target Market Selection

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-21 Figure 8.5 Segment-by-Segment Invasion Plan

The DHL Segmentation Programme Course at INSEAD on Advanced Industrial Market Segmentation (2 weeks) Adopted Cranfield Model (Prof. Malcolm MacDonald) Joint Marketing Team formed between 2 Countries (ES & UK) Quant research in the ES & UK Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8-22

DHL Segmentation Programme In conjunction with Bain management consultants we future proofed the segments Qualitative research to re-assess relevant measures 8 Country Quant Validation exercise Segmentation Toolkit rolled out Worldwide New Business Unit created for the Advantage Segment