Market Segmentation and Strategic Targeting

CHAPTERTHREE

Why Segmentation is Necessary

• Consumer needs differs

• Differentiation helps products compete

• Segmentation helps identify media

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Positioning

The value proposition,

expressed through promotion, stating

the product’s or service’s capacity to deliver specific

benefits.

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Criteria for Effective Targeting

Identifiable Sizeable

Stable Accessible

Congruent with the company’s objectives

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Bases for Segmentation

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Consumer-Rooted Segmentation Bases

Demographics

Geodemographic

Personality Traits

Lifestyles

Sociocultural

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Demographic Segmentation

Age Gender

Marital Status Family Life-cycle

Income, Education, and

Occupation

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Personality Traits

• People often do not identify these traits because they are guarded or not consciously recognized

• Consumer innovators– Open minded– Perceive less risk in trying new things

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Lifestyles

• Psychographics• Includes activities,

interests, and opinions

• They explain buyer’s purchase decisions and choices

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Socio-Cultural Values and Beliefs

• Sociological = group• Anthropological = cultural• Include segments based on– Cultural values– Sub-cultural membership– Cross-cultural affiliations

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Consumption-Specific Segmentation Bases

Usage rate

Usage situation

Benefit segmentation

Perceived brand loyalty

Brand relationship

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Consumption-Specific Segmentation

Usage-Behavior • Usage rate– Awareness status– Level of involvement

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Consumption-Specific SegmentationUsage-Behavior

• Usage-situation segmentation– Segmenting on the basis of special occasions or

situations– Example : When I’m away on business, I try to

stay at a suites hotel.

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Benefits Segmentation

• Benefits sought represent consumer needs• Important for positioning• Benefits of media

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Implementing Segmentation Strategies

• Concentrated Marketing– One segment

• Differentiated– Several segments with individual marketing mixes

• Countersegmentation

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