Wong, audren chapter 8 identifying market segments and targets

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Identifying Market Segments
and Targets
Wong, Audren Allen T.
MD12-0073
Marketing Management
Ateneo School of Medicine and Public Health
Chapter 8…

• Target Marketing
• Market Segment
• Consumer characteristics and responses
– Geographic Segmentation
• Grassroots marketing
– Demographic Segmentation
– Multicultural marketing
– Psychographic Segmentation
– Behavioral Segmentation
• Combining data for richer consumer description
• Not all segmenting schemes are useful
• Steps in the Segmentation Process
• Selecting Market Segments
OUTLINE

Concept 1: Target marketing
• Companies cannot connect with all customers in large, broad, or
diverse markets
• Kotler Example: Club Med
• “To compete more effectively…[companies] are now focusing on those
consumers they have the greatest chance of satisfying.”
• Kotler:
• Target marketing
• Segmentation:
– Identify and profile market segments
– Select market segment(s) to enter
– Establish and communicate distinctive benefit(s) of the company’s
market offering

Concept 2: Bases for Segmenting
Consumer Markets
• Market segments
– Large, identifiable groups within a market
– Group of customers who share a similar set of
needs and wants
• Marketer’s Job:
– Identify appropriate number and nature of market
segments
– Decide which one to target

How do we define market segments?
• Consumer
Characteristics
• Consumer Responses
• “Do these segments
exhibit different needs
or product responses?
– Kotler and Local: Attitude of
“professionals,” “blue
collars,” etc on “safety” as a
product benefit?
– Medical: Clearance for work
vs Clearance for elective
procedures
• Geographic
• Demographic
• Psychographic
• Behavioral

Concept 3: Geographic Segmentation
• Divide into geographical units
– Kotler/Local: Nation, States, Regions, Countries, Cities,
Neighborhoods
– Medical Application: Medical Diagnostics Hubs in densely
populated areas

• Getting as close and personally relevant to
individual customers as possible
– Kotler: Nike (sponsorship of local school teams, expert-conducted
clinics, provision of shoes, clothing, equipment); Citibank and
neighborhood demographics, Curves
– Local: GK
– Medicine: Gov’t Medical Missions
Concept 4: Grassroots
marketing

– Kotler: Crest and Colgate to age and life cycle
stage (kids, adults, older consumers), Pampers
– Local: Dove deodorants for men/women
– Medical: Belo
Concept 5: Demographic
Segmentation

• Approach recognizing that different ethnic and cultural
segments have sufficiently different needs and wants to
require targeted marketing activities
• Growing Hispanic American, African American, Asian
American Markets buying power
• Can result in different marketing messages, media,
channels, etc.
– Kotler: McDonalds “I’m Loving It” rooted in hip-hop culture;
– RP: LGBT
– Medical: Topic conferences in TMC
Concept 6: Multicultural
Segmentation

• Psychographics
– Using psychology and demographics to better understand
consumers
– Grouped on the basis of psychological/personality traits,
lifestyle, or values
– Kotler/Local: VALS (Innovators, Thinkers, Achievers,
Experiencers, Believers, Strivers, Makers, Makers,
Survivors)
– Medical: Who is willing to avail of latest medical treatments
made available in the Philippines (e.g. Stem cell)
Concept 7: Psychographic
Segmentation

• Grouped on the basis of knowledge of, attitude toward,
use of, or response to a product
• Needs and benefits
– Enthusiast, Image Seekers, Savvy Shoppers, Traditionalist, Satisfied
Sippers, Overwhelmed
• Decision Roles
– Kotler: Men and shaving equipment; women and panty hoses
• User and Usage
– Occasions, User Status
– Kotler/Medical: On user status: For blood donors (first-time, ex-donors)
• Buyer-Readiness Stage
• Loyalty Status:
– Hard-core loyals; Split loyals, Shifting loyals, Switchers
Concept 8: Behavioral
Segmentation

• Kotler: PRIZM (Potential Rating Index by Zip
Markets), US Army, Sodexho Marriott, Ace
Hardware
• Medical: Diagnostic Packages, Medicines for senior
citizens
• Demographic variables are the most important,
followed by the operating variables – down to the
personal characteristics of the buyer
Concept 9: You can combine data to
yield even richer descriptions of
consumers

• Kotler/ Local: Table Salt and customer’s
color of hair
• Medial: You don’t see routine blood tests
being marketed individually
• To be useful, market segments must rate
favorably on 5 key criteria
– Measurable
– Substantial
– Accessible
– Differentiable
– Actionable
Concept 10: Not all segmentation
schemes are useful

• Needs-Based Segmentation
• Segment Identification
• Segment Attractiveness
• Segment Profitability
• Segment Positioning
• Segment “Acid Test”
• Marketing-Mix Strategy
Concept 11: Steps in the
Segmentation Process

• Undifferentiated/ Mass marketing
– Goes after the whole market with one offer
– Appropriate when all consumers have roughly same
preferences
• Kotler: Model T-Ford has only one color, black
• Local: Magic Sarap for Filipino households
• Medical: Multivitamin commercials
– High potential, lower cost, lower prices, higher margins
• Differentiated marketing
– Groups of consumers with different wants/needs
– Fine-tune marketing program/activities
• Kotler/Local: Estée Lauder, Clinique
• Medical: Met, skin-whitening products
Concept 12: Selecting market
Segments (Targeting)

• Multiple Segment Specialization
– Selective Specialization
– Selects a subset of all the possible segments, each objectively
attractive an appropriate
– Little or no synergy
• Kotler: Crest Whitestrips
• Product specialization
– Selling a product to several different market segments
• Kotler: Microscopes sold to university, government, and commercial
laboratories
• Medical: Braun products in medical schools and hospitals (e.g. IV
needles)

• Market specialization
– Serving many needs of a particular customer group
• Kotler:
• Local/Medical: Braun medical skills training in medical schools
• Single Segment Specialization
– Marketing to only one segment
– Niche - narrowly defined customer group seeking a distinctive mix
of benefits within a segment (subsegments)
• Kotler: Porche on sports car market, Volkswagen on small-car market
• Local: Jeepneys and Tricycles
• Medical: Doctor J (Medical market)

• Individual Marketing
– Ultimate level of segmentation leads to “segments of one,”
“customized marketing,” or “one-to-one marketing”
– Kotler: use of internet: eBay, iTunes, Amazon
– Local: OLX
– Medical: (?)

• Target marketing includes three activities: market
segmentation, market targeting, and market positioning
• Market segments are large, identifiable groups within a market.
• Two bases for segmenting consumer markets are consumer
characteristics and consumer responses.
• The major segmentation variables for consumer markets are
geographic, demographic, psychographic, and behavioral.
Marketers use them singly or in combination
• To be useful, market segments must be measurable, substantial,
accessible, differentiable, and actionable
• We can target markets at four main levels: mass, multiple
segments, single (or niche) segment, and individuals.
• A niche is a more narrowly defined group. Globalization and the
Internet have made niche marketing more feasible to many.
SUMMARY

Wong, audren chapter 8 identifying market segments and targets

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