Based on Marketing Management by Philip Kotler, Chapter 8

1. Identifying Market Segments and Targets Carisse Diana A. Drilon ASMPH MD-MBA May 11, 2010

2. Outline: Why identify? Levels of Market Segmentation Segmenting Consumer Markets Evaluating and Selecting Market Segments

3. Why identify? Companies cannot connect with all customers in large, broad, or divers markets. Mass marketing is no longer that effective Splintering of market advertising media distribution channels.

4. The market can be segmented into 4 levels: Segment Marketing Niche Marketing Local Marketing Individual Marketing: Customerization

5. customers with similar set of needs and wants : Segment Marketing Concept 1 Marketer must identify the markets and decide which one to target Kotler example: Siemens Electrical Apparatus Division Local Example: Cebu Pacific Airlines Medical Application: The Medical City Breast Clinic

6. defined customer group looking for a distinct mix of benefits: Niche Marketing Concept 2 Has a distinct set of needs, willing to pay a premium, fairly small, gains economies through specialization Kotler example: Hallmark Local example: VMV Hypoallergenics Medical application: Subspecializing in a certain field

7. Tailoring to needs and wants of local groups: Local marketing Concept 3 Emphasis on local marketing initiatives Kotler example: Citibank Local example: McDonald’s Medical application: Private practice of doctors in different areas

8. Empowers customers to design the product and service: Customerization Concept 4 Firm provides a platform and tools and “rents” out to the customers the means to design the products. Kotler example: JackRabbit Custom Bikes Local example: Specialty bakeshops making custom-designed cakes, etc. Medical application: Patient care is individualized

9. Segmenting Consumer Markets Geographic Region, City or Metro Size, Density, Climate Demographic Age, Gender, Family size and Fife cycle, Race, Occupation, or Income ... Psychographic Lifestyle or Personality Behavioral Occasions, Benefits, Uses, or Attitudes

10. Dividing market into geographical units: Geographic Segmentation Concept 5 Can be divided into nations, states, regions, countries, cities, or neighborhoods Kotler example: Bed Bath and Beyond Local example: Jollibee Medical application: Local health units

11. Market divided into groups based on variables: Demographic Segmentation Concept 6 Variables such as age, family size, family life cycle, gender, income, occupation, education, religion, etc. Kotler example: Dove’s Campaign for Real Beauty Local example: Pond’s Age Defying Serum Medical application: Age-specific specialization (Pediatrics, Geriatrics, etc.) Gender specific specialization (OB-Gyn, Urology, etc.)

12. Divided based on Psychographic Profiles:Psychographic Segmentation Concept 7 Market is divided into different groups on the basis of psychological/personal traits, lifestyle, or values Kotler example: Transport Canada Local example: Philippine Airlines Medical application: St. Luke’s Medical Center, Global City

13. Based on decision roles and behavioral variables: Behavioral Segmentation Concept 8 Divide market into groups on the basis of their knowledge of, attitude toward, use of, or response to a product Kotler example: Cranberries Local example: Queso de Bola Medical application: Flu shot

14. Evaluating and Selecting Market Segments Selective specialization M1 M2 M3 P1 P2 P3 Full market coverage M1 M2 M3 P1 P2 P3

15. Selecting a number of market segments:Selective Specialization Concept 9 There may be little or no synergy among the segments, but each promises to be a moneymaker Kotler example: Proctor and Gamble Crest White Strips Local example: Swish Mouthwash Medical application: Dermatology Clinic

16. Serve all customer groups:Full Market Coverage Concept 10 Firm attempts to serve all customer groups with all the products they might need. Kotler example: Coca-Cola Local example: United Laboratories, Incorporated Medical application Big hospitals (The Medical City, St. Luke’s Medical Center, Makati Medical Center)

17. Outline: Why identify? Levels of Market Segmentation Segmenting Consumer Markets Evaluating and Selecting Market Segments

18. Identifying Market Segments and Targets Carisse Diana A. Drilon ASMPH MD-MBA May 11, 2010