2007 Pearson Education Canada1 Marketing 11 Chapter 6 Market Segmentation and Target marketing Lesson 1: pp Lesson 1: The Levels of Market Segmentation pp

2007 Pearson Education Canada2 What is a Market? A group of people with a similar need for a product or service. A group of people with a similar need for a product or service. Must have Must have –Common product needs –The money to buy the product –Ability to buy the product (authority)

2007 Pearson Education Canada3 Levels of Market Segmentation Mass Market Niche 1:1 Depending on an organization’s size and resources, different segmentation strategies may be employed at the same time. Segment Niche

2007 Pearson Education Canada4 Mass Marketing “One basic marketing strategy appealing to a broad range of consumers, not addressing any distinct characteristics among the consumers.” Wal-Mart

2007 Pearson Education Canada5 Mass Marketing Nature of product must lend itself to widespread acceptance / appeal Nature of product must lend itself to widespread acceptance / appeal This is the Exception, not the Rule This is the Exception, not the Rule Most companies avoid mass marketing because few products enjoy widespread acceptance Most companies avoid mass marketing because few products enjoy widespread acceptance

2007 Pearson Education Canada6 Market Segmentation “Dividing a large market (mass market) into smaller homogeneous markets (segments) based on common needs and / or similar lifestyles.” Automobile Market EconomyLuxuryMid-SizeSport Utility

2007 Pearson Education Canada7 Market Segmentation Company has specialized its product Company has specialized its product Product no longer has widespread acceptance / appeal Product no longer has widespread acceptance / appeal To maximize profit, company usually operates in more than one segment To maximize profit, company usually operates in more than one segment Businesses must be alert to shifting consumer trends & economic cycles, or suffer dramatic decreases in sales Businesses must be alert to shifting consumer trends & economic cycles, or suffer dramatic decreases in sales

2007 Pearson Education Canada8 Niche Marketing Marketing to subgroups within a segment where there is less competition. Market: Fitness Centre Market Segment: Women’s Only Fitness Centre Niche Market: Fitness Centre for Overweight Women

2007 Pearson Education Canada9 Niche Marketing Niche Market has unique and identifiable characteristics Niche Market has unique and identifiable characteristics Presents sufficient opportunity and profit potential Presents sufficient opportunity and profit potential Few competitors means larger market share Few competitors means larger market share

2007 Pearson Education Canada10 Direct (1:1) Segmentation “Unique marketing programs are designed to meet the needs and preferences of individual customers.”  Database management techniques  Mass customization  Customer relationship management  Direct communications

2007 Pearson Education Canada11 Direct (1:1) Marketing Based on the concept of relationship marketing & database marketing Based on the concept of relationship marketing & database marketing Mass customization: a marketing system that can produce products and personalize messages to a target audience of one. Mass customization: a marketing system that can produce products and personalize messages to a target audience of one. –E.g. tailor shop, google personalized page

2007 Pearson Education Canada12 Any Questions? Assignment: - Read p Complete WSH 6.1