1. Market Targeting and Segmentation

2. Market Targeting Market Segmentation
Definitions
Target Market
－The group of customers (people or organisations) at whom the seller intends to aim its marketing efforts Market Segmentation
Market Segmentation
dividing a heterogeneous group of buyers into a more homogeneous group with relatively similar product needs.

3. Market Segmentation Why segment the market?
1. Better service to meet customer needs
2. Compete more effectively and efficiently
3. Achieve organisational goals

4. Market Segmentation - 1. Increased production costs
What are the disadvantages to Segmentation?
- 1. Increased production costs
- 2. Increased promotion expenditures
- 3. Increased inventory costs
- 4. Increased administration costs

5. Market Segmentation The Keys to Successful Segmentation?
- 1. The segment must be Measurable
- 2. The segment must be Accessible
- 3. The segment must be Responsive
- 4. The segment must be Substantial
- 5. The segment must be Defensible

6. Market Targeting Definitions Market Targeting
The act of evaluating and selecting segments and positioning your product

7. Market Targeting Market Positioning
Definitions
Market Positioning
The place the product holds in the mind of the consumer

8. The Steps in Market Segmentation, Targeting and Positioning

9. Market Targeting Methods
1. Identify Bases for Segmenting the Market
- 1. Geographic - by regional, city, local, density or climate

10. Market Segmentation Methods
- 2. Demographic - age, gender, family size, family life cycle, income, occupation, education, religion, race or nationality

11. Market Targeting Methods
1. Identify Bases for Segmenting the Market
- 3. Psychographic - social class, lifestyle, or personality
- 4. Behaviouristic - based on the behaviour of the consumers

12. Market Targeting Methods
1. Identify Bases for Segmenting the Market
4. Behaviouristic-
-Purchase occasion - Regular occasion, special occasion (e.g., flowers)
-benefits sought - quality, service, economy e.g.,autos, refrigerators
-user status - Non-user,ex-user,potential user,first-time user,e.g.drug rehabilitation
-Usage rate - light user, medium user, heavy user, e.e.,beer
-loyalty status - none,medium,strong and absolute,e.g.,political parties,Holdens

13. Market Targeting Methods
1. Identify Bases for Segmenting the Market
4. Behaviouristic -
- Readiness Stage - aware, interested, desire, action,
- Attitude Toward Product - enthusiastic, positive, indifferent, negative, hostile, e.g., political economic packages

14. Market Targeting Methods
2. Develop Profiles of the Resulting Segments
-A. Attitudes, Interests and Opinions (Cultural, Sports,etc.)
-B. Lifestyles Categorisations (Yuppie, DINK, Green)
-C. Statistical Clustering Techniques (Math Categories)

15. Market Targeting Methods
3. Develop Measures of Segment Attractiveness
-A. How Many Segments Should be Covered?
-i Undifferentiated Marketing- Apply marketing mix to target entire market
-ii Concentrated Marketing - Apply marketing mix to one segment
-iii Multiple Segmentation Apply various marketing mixes to various market segments

16. Market Targeting Methods
3. Develop Measures of Segment Attractiveness
B. Choosing a Market Coverage Strategy
-i. Company Resources
-ii. Product homogeneity (Commodities vs. value Added)
-iii.Product Stage in Product Life Cycle

17. Market Targeting Methods
3. Develop Measures of Segment Attractiveness
-C. Identifying Attractive Segments
-Market Demand = # of buyers x quantity
purchased /yr x price

18. Demand Estimate
Normally, to calculate demand a firm must perform market research
Use government records to get figures related to population, special interest groups
Demand is calculated by using segmentation variables to reduce the number of buyers starting from a population

19. Demand Estimate
Palm VII Personal Assistants

20. Demand Estimate Palm VII
Population of Perth = 1,000,000 X Number of
Computer users (.2) Behavioristic variable
X Number of Business Professions needing Mobile Organizer
(.5) Demographic - occupation
X Market Share of Palm VII (.3) Marketing variable
X Income large enough to afford (.1) Demographic variable
X Price of $1000
= $3,000,000

21. Market Targeting Methods
4. Select Target Markets
-Make selections based on corporate goals(i.e.., high market share, profit, ROI)

22. Market Targeting Methods
5. Select a Positioning Strategy for Each Target Segment
-Multidimensional Scaling - statistical technique for plotting product positioning

23. MDS Example _____________________________
Economy
_____________________________
Toyota Corolla
Ford Capri
Holden Commodore
Sporty
__________________________________________________
Conventional
Mazda MX5
Saab
Mazda RX-7
Volvo
Porsche
Mercedes Benz
High Price

24. Market Targeting Methods
6. Develop a Marketing Mix for Each Target Segment
You will determine what price, promotion method, product configuration and distribution method to use with each profile developed.

25. Computer Market Segment Description