1. IDENTIFYING MARKET SEGMENTS & TARGET
Prepared for:
Universitas Ciputra
IDENTIFYING MARKET SEGMENTS & TARGET
CHAPTER 8
PHILLIP KOTLER & KEVIN LANE KELLER

2. Marketing Process

3. Steps in Target Marketing
Market Segmentation
1. Identify bases for segmenting the market
2. Develop segment profiles
Market Targeting
3. Develop measure of segment attractiveness
4. Select target market
Market Positioning
5. Develop positioning for target segment
6. Develop a marketing mix for each segment
Market Segmentation:
Dividing a market into distinct groups of buyers on the basis of needs, characteristics, or behavior who might require separate products of marketing mixes
Market Targeting:
The process of evaluating each market segment’s attractiveness and selecting one or more segments to enter
Market Positioning:
Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumer; eg. 7-up the Uncola
Positioning: customers’perception about a brand or how marketer wants its customers think about them
Example: Seven Up, in competing with string brands in soft drink market (Coca Cola and Pepsi) positioned it self as the uncola through its tagline “Seven-up: the uncola”.
Position is not only about something shown in tagline or slogan, but it can in term of action marketer takes.
Positioning needs to be supported by a solid differentiation.
Positioning is not only about promise but also gaining customers' trust
PDB (position differentiation brand)
Brand needs to be clearly positioned in customers’mind hence the brand has a clear brand identity.
Positioning yang didukung oleh diferensiasi yang solid akan menghasilkan brand integrity yang kuat.
Brand integrity yang kuat ini pada gilirannya, akan menghasilkan brand image yang kuat. Dan pada akhirnya, brand image yang kuat akan memperkuat
Brand itu sendiri.
New wave marketing by hermawan kartajaya p. 140

4. Level of Market Segmentation
Mass Marketing (no segmentation)
Segment Marketing
Niche Marketing
Micro Marketing (Complete Segmentation)

5. Segmenting Consumer Market
World region, Country region, City or metro size, Density, Climate
Geographic
Age and life cycle, Life stage, Gender, Family size, Family life-cycle, Income, Occupation, Education, Generation, Nationality, Social class
Demographic
Lifestyle, Personality, Values
Psychographic
Occasions, Benefits, User status, Usage rate, Loyalty Status, Readiness status, Attitude toward product
Behavioral

6. Behavioral Segmentation Breakdown
Target Market
Unaware
Aware
Not Tried
Negative Opinion
Neutral
Favorable Opinion
Tried
Rejector
Not yet repeated
Repeated
Loyal to other brand
Switcher
Loyal to brand
Light user
Regular user
Heavy user

7. Segmenting Business Market [1]
Demographic
Industry
Industry to serve
Company Size
Size of company to serve
Location
Geographic area to serve
Operating Variables
Technology
Customer technology should we focus on
User-nonuser status
Serve heavy, medium, light or non-user
Customer capability
Serve customer needing many or few services
Purchasing Approaches
Purchasing function organization
Serve companies with highly centralized or decentralized purchasing organization?
Power structure
Serve companies that are engineering dominated, financing dominated, or so on?
Nature of existing relationship
Serve companies with which we have strong relationship or simply go after the most desirable one?
General purchase policies
Serve company that prefers leasing, service contract, system purchased, sealed bidding (tender)
Purchasing criteria
Serve company that focus oriented to quality? service? price?

8. Segmenting Business Market [2]
Situational factors
Urgency
Focus on company that needs quick and sudden delivery or service
Specific application
Focus on company that prefer certain application of our product or all application
Size of order
Focus on company with small or large orders
Personal characteristics
Buyer-seller similarity
Focus on company which people and values are similar to ours
Attitude toward risk
Focus on company that is risk-taking or risk-averse
Loyalty
Focus on company that shows high loyalty to their suppliers

9. Step in Segmentation Process
Needs-based segmentation
Segment identification
Segment attractiveness
Segment profitability
Segment positioning
Segment “Acid Test”
Marketing-mix strategy
Group customers into segments based on similar needs
Determine which demographics, lifestyle, and usage behavior make the segment distinct and identifiable
Determine the overall attractiveness of each segment (market growth, market access, etc)
Determine segment profitability
Create segment storyboard to test the attractiveness of each segment positioning strategy
Create a value proposition& product-price positioning strategy
Expand segment positioning strategy to include all aspects of the marketing mix

10. Effective Segmentation Criteria
Measurable
Substantial
Accessible
Differentiable
Actionable
Measurable: the size, purchasing power, characteristic can be measured
Substantial: the segment is large and profitable enough to be served
Accessible: it is easy for the company for entering the segment market
Differentiable: the segment’s are conceptually distinguishable and respond differently to different marketing mix elements and program
Actionable: attractive program can be formulated for attracting and serving the segment

11. Selecting and Evaluating Market SegmentP1 P2 P3 M1 M2 M3 P1 P2 P3 M1 M2 M3 P1 P2 P3
Single-segment
concentration
Selective specialization
Product specialization M1 M2 M3 P1 P2 P3 M1 M2 M3 P1 P2 P3
Market specialization
Full-market Coverage

12. Additional Consideration
Ethical choice of market target
Segment-by- segment invasion plan
Intersegment cooperation