1. 8 Identifying Market Segments and Targets1
8 Identifying Market Segments and Targets

2. Chapter Questions
What are the different levels of market segmentation?
How can a company divide a market into segments?
What are the requirements for effective segmentation?
How should business markets be segmented?
How should a company choose the most attractive target markets?
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3. Effective Targeting Requires…
Identify and profile distinct groups of buyers who differ in their needs and preferences
Select one or more market segments to enter
Establish and communicate the distinctive benefits of the market offering
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4. What is a Market Segment?
A market segment consists of a group of customers who share a similar set of
needs and wants.
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5. Segmenting Consumer Markets
Geographic
Demographic
Psychographic
Behavioral
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6. Geographic Segmentation
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7. Claritas’ Prizm Education and affluence Family life cycle Urbanization
Race and ethnicity
Mobility
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8. Demographic Segmentation
Age and life cycle
Life stage
Gender
Income
Generation
Social class
Race and Culture
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9. Age and Lifecycle Stage
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10. Gender and Income
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11. Generational Influences
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12. Race and Culture
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13. Psychographic Segmentation and The VALS Framework
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14. Behavioral Segmentation Based on Needs and Benefits
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15. Behavioral Segmentation: Decision Roles
Initiator
Influencer
Decider
Buyer
User
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16. Behavioral Segmentation: Behavioral Variables
Buyer-Readiness
Loyalty Status
Attitude
Occasions
Benefits
User Status
Usage Rate
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17. Figure 8.2 Example of a Brand Funnel
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18. Loyalty Status Hard-core Split loyals Shifting loyals Switchers
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19. Figure 8.3 Behavioral Segmentation Breakdown
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20. Segmenting for Business Markets
Demographic
Operating variable
Purchasing approaches
Situational factors
Personal characteristics
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21. Steps in Segmentation Process
Need-based segmentation
Segment identification
Segment attractiveness
Segment profitability
Segment positioning
Segment acid test
Market mix strategy
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22. Effective Segmentation Criteria
Measurable
Substantial
Accessible
Differentiable
Actionable
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23. Threat of Buyer Bargaining Power
Porter’s 5 Forces Model
Threat of Rivalry
Threat of Buyer Bargaining Power
Threat of Supplier
Bargaining Power
Threat of Substitutes
Threat of
New Entrants
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24. Figure 8.4 Possible Levels of Segmentation
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25. For Review What are the different levels of market segmentation?
How can a company divide a market into segments?
What are the requirements for effective segmentation?
How should business markets be segmented?
How should a company choose the most attractive target markets?
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