1. A FRAMEWORK for MARKETING MANAGEMENT
Chapter 7
Identifying
Market
Segments
and Targets
Kotler Keller Cunningham 1

2. © Copyright 2008 Pearson Education Canada
Chapter Questions
How can a company identify the segments that make up a market?
What criteria can a company use in selecting attractive segments to enter through target marketing?
© Copyright 2008 Pearson Education Canada

3. Profile: Canadian Marketing Excellence LULULEMON
lulelemon athletica was founded in 1998 by Chip Wilson, a yoga enthusiast
To get instant feedback, the company put its design room in the middle of its retail store
Yoga instructors were asked to test the clothing and began recommending it to their own students
Products are priced at a premium to reflect their innovative design which houses high performance athletic wear
lululemon now has stores across Canada, the United States, Tokyo, and Melbourne
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4. Effective Targeting Requires...
Identifying and profiling distinct groups of buyers who differ in their needs and preferences
Selecting one or more market segments to enter
Establishing and communicating the distinctive benefits of the market offering
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5. Levels of Market Segmentation
Segment marketing
Niche marketing
Local marketing
Customerization
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6. Customerization Customerization combines operationally driven
mass customization with customized
marketing in a way that empowers
consumers to design the
product and service offering
of their choice
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7. Figure 7.1 Basic Market-Preference Patterns
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8. Segmenting Consumer Markets
Geographic
Demographic
Psychographic
Behavioural
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9. Segmenting Consumer Markets
Nation or country
Province or region
City or metro size
Density
Climate
Bases for Segmentation
Geographic
Demographic
Psychographic
Behavioural
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10. Segmenting Consumer Markets
Age, race, gender
Income, education
Family size
Family life cycle
Occupation
Religion, nationality
Generation
Social class
Example: RBC Financial created a “gender intelligent sales force” that led to a 29% increase in customer satisfaction in women entrepreneurs
Bases for Segmentation
Geographic
Demographic
Psychographic
Behavioural
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11. Segmenting Consumer Markets
Bases for Segmentation
Geographic
Demographic
Psychographic
Behavioural
Lifestyle
Activities
Interests
Opinions
Personality
Core values
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12. Segmenting Consumer Markets
Bases for Segmentation
Geographic
Demographic
Psychographic
Behavioural
Occasions
Benefits
User status
Usage rate
Loyalty status
Buyer-readiness
Attitude
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13. Behavioural Segmentation: Decision Roles
Initiator
Influencer
Decider
Buyer
User
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14. Behavioural Segmentation Variables
Occasions
Attitude
Benefits
Variables
User
status
Loyalty
Buyer-
readiness
Usage
rate
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15. © Copyright 2008 Pearson Education Canada
Loyalty Status
Hard-core
Split loyals
Shifting loyals
Switchers
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16. Major Segmentation Variables for Business Markets
Demographic
Operating variable
Purchasing approaches
Situational factors
Personal
characteristics
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17. Sequential Segmentation and Stage of Purchase Process
First-time prospects
Novices
Sophisticates
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18. Effective Segmentation Criteria
Measurable
Actionable
Substantial
Accessible
Differentiable
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19. Marketing Skills: Evaluating Segments THE GLOBE & MAIL
The Globe and Mail is only one of two national daily newspapers in Canada
Aims to provide a national and international flavour to its newspaper content
It decided that it needed to reassert its leadership in its original geographic segment, Toronto
The paper consolidated its local news coverage with the launch of a daily Toronto section
The intention was to more effectively reach Toronto’s influential readership
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20. Steps in Segmentation Process
Needs-based segmentation
Segment identification
Marketing-mix
strategy
Segment attractiveness
Segment profitability
Segment positioning
Segment acid test
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21. Figure 7.3 Patterns of Target Market Selection
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22. Additional Considerations
Segment-by-segment invasions
Updating segmentation schemes
Ethical choices of target markets:
The Concerned Children’s Advertisers (CCA)
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23. For Discussion How would you classify yourself in
terms of the various segmentation
schemes discussed in the chapter?
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