SEGMENTING AND TARGETING MARKET
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Transcript of SEGMENTING AND TARGETING MARKET
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SEGMENTING AND TARGETING
MARKETS
CHAPTER 4
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LEARNING OUTCOMES
Describe the characteristics of markets
and market segments
Explain the importance of marketsegmentation
Discuss criteria for successful marketsegmentation
Describe the bases commonly used tosegment consumer markets
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Describe the bases for segmentingbusiness markets
List the steps involved in segmenting markets
Discuss alternative strategies for selecting
target markets
Explain one-to-one marketing
Explain how and why firms implementpositioning strategies and how product
differentiation plays a role
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A MARKET IS...
(1)people or organizations with
(2) needs or wants, and with
(3) the ability and
(4) the willingness to buy.
A group of people that lacks any one ofthese characteristics is not a market.
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MARKET SEGMENTATION
MarketPeople or organizations with
needs or wants and the abilityand willingness to buy.
MarketSegment
A subgroup of people ororganizations sharing one or more
characteristics that cause themto have similar product needs.
MarketSegmentation
The process of dividing a marketinto meaningful, relatively similar,
identifiable segments or groups.
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THE CONCEPT OF MARKETSEGMENTATION
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THE IMPORTANCE OF
MARKET SEGMENTATION
Markets have a variety of product
needs and preferences
Marketers can better define
customer needs
Decision makers can define objectives
and allocate resources more accurately
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Marketsegmentation
More precisedefinition ofcustomersneeds and
wants
More
accuratemarketingobjectives
Improvedresourceallocation
Bettermarketing
results
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CRITERIA FOR SEGMENTATION
Accessibility
Members of targetedsegments must be reachable
withmarketing mix.
ResponsivenessUnless segment responds to amarketing mix differently, noseparate treatment is needed.
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BASES FOR SEGMENTING CONSUMER
MARKETS
SegmentationBases
Characteristics ofindividuals, groups, or
organizations used to
divide a total market into
segments.
(variables)
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BASES FOR SEGMENTATION
Usage RateUsage Rate
Benefits SoughtBenefits Sought
PsychographicsPsychographics
DemographicsDemographics
GeographyGeography
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GEOGRAPHIC SEGMENTATION
Region of the country or world
Market size
Market density
Climate
OG C
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DEMOGRAPHICSEGMENTATION
AgeAge
GenderGender
IncomeIncome
Ethnic backgroundEthnic background
Family life cycleFamily life cycle
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PSYCHOGRAPHICSEGMENTATION
Psychographic
SegmentationMarket segmentation
on the basis of
personality, motives,
lifestyles, and
geodemographics.
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Usage-RateSegmentation
Dividing a market by the
amount of product bought
or consumed.
80/20Principle
A principle holding that
20 percent of all customers
generate 80 percent of
the demand.
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BASES FOR SEGMENTING BUSINESSMARKETS
CompanyCharacteristic
s
CompanyCharacteristic
s
BuyingProcesses
BuyingProcesses
ProducersProducers
ResellersResellers
GovernmentGovernment
InstitutionsInstitutions
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Company Characteristics
BASES FOR SEGMENTING BUSINESSMARKETS
Geographic location
Type of company
Company size
Volume of purchase
Product use
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BUYER CHARACTERISTICS
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Demographic characteristicsDemographic characteristics
Decision styleDecision style
Tolerance for riskTolerance for risk
Confidence levelConfidence level
Job responsibilitiesJob responsibilities
BUYER CHARACTERISTICS
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STEPS IN SEGMENTING MARKETS
Selecta
market
forstudy
Choosebasesfor
segmentation
Selectdescript
ors
Profileand
analyzesegment
s
Selecttargetmarket
s
Design,impleme
nt,maintainmarketin
gmix
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STRATEGIES FOR SELECTING TARGETMARKETS
TargetMarket
A group of people or
organizations for which
an organization designs,
implements, and
maintains a marketing
mix intended to meet the
needs of that group,resulting in mutually
satisfying exchanges.
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Undifferentiated Multisegment Concentrated
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UNDIFFERENTIATED TARGETINGSTRATEGY
UndifferentiatedTargetingStrategy
A marketing approach
that views the market as
one big market with no
individual segments and
thus
requires a single
marketing mix.
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UndifferentiatedStrategy
UNDIFFERENTIATED TARGETING
STRATEGYAdvantage:
Potential savings onproduction and marketingcosts
Disadvantages:
Unimaginative productofferings
Company more susceptibleto competition
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Concentrated
Targeting Strategy
CONCENTRATED TARGETINGSTRATEGY
A strategy used to select
onesegment of a market for
targeting marketing
efforts.
Niche
One segment of a
market.
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CONCENTRATED TARGETINGSTRATEGY
ConcentratedStrategy
Advantages: Concentration of
resources
Meets narrowly definedsegment
Small firms can compete Strong positioning
Disadvantages: Segments too small, or
changing Large competitors may
market to niche segment
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MultisegmentTargetingStrategy
MULTISEGMENT TARGETINGSTRATEGY
A strategy that chooses
two or more well-defined
market segments and
develops a distinct
marketing
mix for each.
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MULTISEGMENT TARGETINGSTRATEGY
MultisegmentStrategy
Advantages:
Greater financial success Economies of scale
Disadvantages:
High costs Cannibalization
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ONE-TO-ONE MARKETING
One-to-One
Marketing
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Information-IntensiveInformation-Intensive
Long-TermLong-Term
One-to-OneMarketing is...One-to-One
Marketing is...
IndividualizedIndividualized
Cost ReductionCost Reduction
Has a Goal ofHas a Goal of
Customer LoyaltyCustomer Loyalty
Increased RevenueIncreased Revenue
PersonalizedPersonalized
Customer RetentionCustomer Retention
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Trends (one-to-one marketing)
1. One-size-fits all marketing no longereffective.
2. Direct and personal marketing will growto meet needs of busy consumers.
3. Consumers will be loyal to companies that
have earnedand reinforcedtheirloyalty.
4. Mass-media approaches will decline as
technology allows better customertrackin .
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Positioning
POSITIONING
Developing a specific
marketing mix to influence
potential customers overall
perception of a brand,
product line, or organization
in general.
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EFFECTIVE POSITIONING
1. Assess the positions occupied bycompeting products
2. Determine the dimensionsunderlying these positions
3. Choose a market position wheremarketing efforts will have the
greatest impact
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Product
Differentiation
PRODUCTDIFFERENTIATION
A positioning strategy
that some firms use todistinguish their products
from those ofcompetitors.
Distinctions can be realor perceived.
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Repositioning
REPOSITIONING
Changing consumers
perceptions of a brand inrelation to competing
brands.
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Positioning and Product Differentiation
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THANKYOU