0. Identifying Market Segments and Selecting Target Markets
Chapter 9
Identifying Market Segments and Selecting Target Markets
PowerPoint by Karen E. James
Louisiana State University - Shreveport
To accompany A Framework for Marketing Management, 2nd Edition

1. To accompany A Framework for Marketing Management, 2nd Edition
Objectives
Learn how companies identify the segments that make up a market.
Understand the criteria companies use to choose the most attractive market segments.
To accompany A Framework for Marketing Management, 2nd Edition

2. To accompany A Framework for Marketing Management, 2nd Edition
Target Marketing
Target marketing requires marketers to take three major steps:
Market segmentation: Identifying and profiling distinct groups of buyers who differ in their needs and preferences.
Market targeting: Selecting one or more market segments to enter.
Market positioning: Establishing and communicating the key distinctive benefit(s) of the company’s market offering to each target.
To accompany A Framework for Marketing Management, 2nd Edition

3. Using Market Segmentation
Mass marketing is losing popularity
Micromarketing can be undertaken at four levels:
Segment marketing
Niche marketing
Local marketing
Individual marketing
To accompany A Framework for Marketing Management, 2nd Edition

4. Using Market Segmentation
Three patterns of preference segments are typically identified:
Homogeneous preferences
Diffused preferences
Clustered preferences
To accompany A Framework for Marketing Management, 2nd Edition

5. Using Market Segmentation
Needs-based Segmentation Process
Needs-based segmentation
Segment identification
Segment attractiveness
Segment profitability
Segment positioning
Segment “acid test”
Marketing-mix strategy
To accompany A Framework for Marketing Management, 2nd Edition

6. Using Market Segmentation
Useful market segments share certain characteristics:
Measurable
Substantial
Accessible
Differentiable
Actionable
To accompany A Framework for Marketing Management, 2nd Edition

7. Segmenting Consumer Markets
Bases for Segmentation
Geographic
Demographic
Psychographic
Behavioral
Nation or country
State or region
City or metro size
Density
Climate
To accompany A Framework for Marketing Management, 2nd Edition

8. Segmenting Consumer Markets
Age, race, gender
Income, education
Family size
Family life cycle
Occupation
Religion, nationality
Generation
Social class
Bases for Segmentation
Geographic
Demographic
Psychographic
Behavioral
To accompany A Framework for Marketing Management, 2nd Edition

9. Segmenting Consumer Markets
Bases for Segmentation
Geographic
Demographic
Psychographic
Behavioral
Lifestyle
Activities
Interests
Opinions
Personality
Core values
To accompany A Framework for Marketing Management, 2nd Edition

10. Segmenting Consumer Markets
Bases for Segmentation
Geographic
Demographic
Psychographic
Behavioral
Occasions
Benefits
User status
Usage rate
Loyalty status
Buyer-readiness
Attitude
To accompany A Framework for Marketing Management, 2nd Edition

11. Segmenting Consumer Markets
Multi-attribute segmentation via geoclustering combines multiple variables to identify smaller, better-defined target groups
PRIZM Geoclustering system uses demographic, geographic, lifestyle, and behavioral characteristics
To accompany A Framework for Marketing Management, 2nd Edition

12. Segmenting Business Markets
Bases for Segmentation
Operating variables
Purchasing approaches
Situational factors
Personal characteristics
Demographic variables
To accompany A Framework for Marketing Management, 2nd Edition

13. Segmenting Business Markets
Rackman and Vincentis proposed a segmentation scheme that classifies business buyers into three groups:
Price-oriented customers: best served via transactional selling
Solution-oriented customers: best served by means of consultative selling
Strategic-value customers: best served by means of enterprise selling
To accompany A Framework for Marketing Management, 2nd Edition

14. Market Targeting Strategies
Evaluating and selecting market segments requires assessing the segment’s overall attractiveness in light of company’s objectives and resources.
Five patterns of target market selection can then be considered.
To accompany A Framework for Marketing Management, 2nd Edition

15. Market Targeting Strategies
Patterns of Target Market Selection
Single-segment concentration
Selective specialization
Product specialization
Market specialization
Full market coverage
To accompany A Framework for Marketing Management, 2nd Edition

16. Market Targeting Strategies
Targeting multiple segments may result in cost economies
Supersegment targeting may be appropriate
Blocked markets often require megamarketing countermeasures
Be aware of ethical concerns
To accompany A Framework for Marketing Management, 2nd Edition