1. Market Segmentation
Chapter 8

2. 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: b2binternational.com

3. Market Segmentation Segmentation Criteria Substantiality
Identifiability
Accessibility
Responsiveness

4. 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

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

6. 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:

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

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

9. 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

10. 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.
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