Shrm_stm

1. 8
Identifying Market
Segments and Targets

2. Chapter Questions
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 8-2
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What are the different levels of market
segmentation?
How can a company divide a market into
segments?
What are the requirements for effective
segmentation?
How should a company choose the most
attractive target markets?
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3. Effective Targeting Requires…
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
Identify and profile distinct groups of buyers
who differ in their needs and preferences
Select one or more market segments to enter
Establish and communicate the distinctive
benefits of the market offering
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4. What is a Market Segment?
A market segment consists of a group
of customers who share a similar set of
needs and wants.
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5. Segmenting Consumer Markets
Demographic
Geographic
Psychographic
Behavioral
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6. Demographic Segmentation
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Age and life cycle
Life stage
Gender
Income
Generation
Social class
Race and Culture
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7. Age and Lifecycle Stage
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 8-7

8. Gender and Income
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9. Generational Influences
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10. Race and Culture
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 8-10

11. Geographic Segmentation
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12. Claritas’ Prizm
(Geo-Demographic Segments)
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Education and affluence
Family life cycle
Urbanization
Race and ethnicity
Mobility
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PRIZM – Potential Rating Index for Zip Markets

13. Psychographic Segmentation and The VALS
Framework (Values, Attitudes & Lifestyles)
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14. Behavioral Segmentation:
Decision Roles
Initiator
Influencer
Decider
Buyer
User
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15. Behavioral Segmentation:
Behavioral Variables
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 8-15
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Occasions
Benefits
User Status
Usage Rate
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Buyer-Readiness
Loyalty Status
Attitude
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16. Figure 8.2 Example of a Brand Funnel
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 8-16

17. Loyalty Status
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Hard-core
Split loyals
Shifting loyals
Switchers
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Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 8-17

18. Figure 8.3 Behavioral
Segmentation Breakdown
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19. Steps in Segmentation Process
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 8-19
• Need-based segmentation
• Segment identification
• Segment attractiveness
• Segment profitability
• Segment positioning
• Segment acid test – testing a segment’s responsiveness
• Market mix strategy

20. Effective Segmentation Criteria
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Measurable
Substantial
Accessible
Differentiable
Actionable
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Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 8-20

21. Porter’s 5 Forces Model
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Threat of Rivalry
Threat of Supplier
Bargaining Power
Threat of Buyer
Bargaining Power
Threat of
New Entrants
Threat of
Substitutes

22. Figure 8.4 Possible Levels
of Segmentation
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23. For Review
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 8-23

What are the different levels of market
segmentation?
How can a company divide a market into
segments?
What are the requirements for effective
segmentation?
How should a company choose the most
attractive target markets?


