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Chapter 4(my) copy


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Chapter 4(my) copy

  1. 1. Fundamental Of Marketing MKT243 Chapter 4 Market Segmentation and Targeting MarketDHD2011 MKT243 Fundamental Of Marketing 1
  2. 2. Segmenting and Targeting Market Topic Outline Definition of segmenting Reasons for segmenting Criteria for Successful segmentation Market Targeting Differentiation and PositioningDHD2011 MKT243 Fundamental Of Marketing 2
  3. 3. Market SegmentationMarket segmentation is the process that companies use to divide large heterogeneous markets into small markets that can be reached more efficiently and effectively with products and services that match their unique needs (Kotler and Gary)Market segmentation is the process of dividing a market into meaningful, relatively similar, and identifiable segments or groups (McDaniel, Lamb, Hair)DHD2011 MKT243 Fundamental Of Marketing 3
  4. 4. Market Segmentation People or organizations with People or organizations with Market Market needs or wants and the ability and needs or wants and the ability and willingness to buy willingness to buy A subgroup of people or organizations A subgroup of people or organizations Market Market sharing one or more characteristics that sharing one or more characteristics that Segment Segment cause them to have similar product cause them to have similar product needs. needs. The process of dividing a market into The process of dividing a market into Market Market meaningful, relatively similar, identifiable meaningful, relatively similar, identifiable Segmentation Segmentation segments or groups. segments or groups.DHD2011 MKT243 Fundamental Of Marketing 4
  5. 5. 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 of these characteristics is not a market.DHD2011 MKT243 Fundamental Of Marketing 5
  6. 6. The Importance of MarketSegmentation 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.DHD2011 MKT243 Fundamental Of Marketing 6
  7. 7. Criteria for Successful Segmentation Substantiality Identifiablyand measurability Accessibility Responsiveness ActionableDHD2011 MKT243 Fundamental Of Marketing 7
  8. 8. Bases for segmenting Consumer MarketsDHD2011 MKT243 Fundamental Of Marketing 8
  9. 9. Market Segmentation Segmenting Consumer Markets Geographic segmentation divides the market into different geographical units such as nations, regions, states, counties, or citiesDHD2011 MKT243 Fundamental Of Marketing 9
  10. 10. Market Segmentation Segmenting Consumer MarketsDemographic segmentation divides the market into groups based on variables such as age, gender, family size, family life cycle, income, occupation, education, religion, race, generation, and nationality DHD2011 MKT243 Fundamental Of Marketing 10
  11. 11. Market Segmentation (Demographic Segmentation)Age and life-cycle stage segmentation is the process of offering different products or using different marketing approaches for different age and life-cycle groupsGender segmentation divides the market based on sex (male or female) DHD2011 MKT243 Fundamental Of Marketing 11
  12. 12. Market Segmentation (Demographic Segmentation)Income segmentation divides the market into affluent or low-income consumersEthnic Segmentation divides the market into races or ethnicityFamily Life-Cycle Segmentation divides market based on stages determined by a combination of age, marital status, and the presence or absence of children. DHD2011 MKT243 Fundamental Of Marketing 12
  13. 13. Family Life CycleDHD2011 MKT243 Fundamental Of Marketing 13
  14. 14. Market SegmentationPsychographic segmentation divides buyers into different groups based on social class, lifestyle, or personality traits The basis for Psychographic segmentation are as follow:1. Personality-Reflects a person’s traits, attitudes and habits. According to national survey by Roper, almost half of Americans believe their cars match their personality.DHD2011 MKT243 Fundamental Of Marketing 14
  15. 15. Cont…2. Motives-Marketers of baby products and life insurance appeal to consumers’ emotional motives-namely, to care for their loved ones3. Lifestyles-Divides people into groups according to the way they spend their time, the importance of the things around them, their beliefs, and socioeconomic characteristics such as income and education.4. Geodemographic-Segmenting potential customers into neighborhood lifestyles categories-It combines geographic and demographic and lifestyles segmentations.DHD2011 MKT243 Fundamental Of Marketing 15
  16. 16. Market Segmentation Segmenting Consumer MarketsBehavioral segmentation divides buyers into groups based on their knowledge, attitudes, uses, or responses to a product Occasions Benefits sought User status Usage rate Loyalty statusDHD2011 MKT243 Fundamental Of Marketing 16
  17. 17. Steps in Segmenting a Market 1 2 3 4 5 6 Select a Choose a Design, Market basis or implement Select Profile Selector product bases for and maintain segmentation and analyze targetCategory segmenting appropriate description segments marketFor study the market marketing mixes DHD2011 MKT243 Fundamental Of Marketing 17
  18. 18. Market Targeting Selecting Target Market Segments Target market consists of a set of buyers who share common needs or characteristics that the company decides to serveDHD2011 MKT243 Fundamental Of Marketing 18
  19. 19. Strategies for Selecting Target Markets Undifferentiated Concentrated Multisegment Strategy Strategy StrategyDHD2011 MKT243 Fundamental Of Marketing 19
  20. 20. Undifferentiated TargetingStrategy Undifferentiated A marketing approach that Undifferentiated Targeting Targeting views the market as one big Strategy Strategy market with no individual segments and thus requires a single marketing mix.DHD2011 MKT243 Fundamental Of Marketing 20
  21. 21. Concentrated Targeting Strategy Concentrated A strategy used to select one Concentrated Targeting Strategy segment of a market for Targeting Strategy targeting marketing efforts. Niche One segment of a market.DHD2011 MKT243 Fundamental Of Marketing 21
  22. 22. Multisegment Targeting Strategy Multisegment A strategy that chooses two or Multisegment Targeting Targeting more well-defined market Strategy Strategy segments and develops a distinct marketing mix for each.DHD2011 MKT243 Fundamental Of Marketing 22
  23. 23. Advantages and Disadvantages ofTarget Marketing Strategies Targeting Strategy Advantages Disadvantages Undifferentiated Potential savings on Unimaginative product production/ marketing offerings costs Company more susceptible to competition Concentrated Concentration of Segments too small, or resources changing Can better meet the Large competitors may needs of a narrowly more effectively market defined segment to niche segment Allows some small firms to better compete with large firms Strong positioningDHD2011 MKT243 Fundamental Of Marketing 23
  24. 24. Cont… Targeting Strategy Advantages Disadvantages Multisegment Greater financial Highcosts success Cannibalization Economies of scale in producing/ marketingDHD2011 MKT243 Fundamental Of Marketing 24
  25. 25. Marketing Targeting Target Market Strategies Micromarketing is the practice of tailoring products and marketing programs to suit the tastes of specific individuals and locations  Local marketing  Individual marketingDHD2011 MKT243 Fundamental Of Marketing 25
  26. 26. Market Targeting Target Market Strategies Local marketing involves tailoring brands and promotion to the needs and wants of local customer groups  Cities  Neighborhoods  StoresDHD2011 MKT243 Fundamental Of Marketing 26
  27. 27. Market Targeting Target Market StrategiesIndividual marketing involves tailoring products and marketing programs to the needs and preferences of individual customers Also known as:  One-to-one marketing  Mass customization  Markets-of-one marketing DHD2011 MKT243 Fundamental Of Marketing 27
  28. 28. Forces Influencing One-to-One MarketingMore diverse societyMore diverse societyMore demanding, More demanding,time-poor consumers time-poor consumersDeclining brand loyaltyDeclining brand loyaltyEmergence of newEmergence of newmedia alternativesmedia alternativesDemand forDemand formarketing accountabilitymarketing accountabilityDHD2011 MKT243 Fundamental Of Marketing 28
  29. 29. Positioning Def: Developing specific marketing mix to influence potential customer’s over all perception of a brand, product line, or organization in general Product position The way the product is defined by consumers on important attributes-the place the product occupies in consumers’ minds relative to competing products Product differentiation A positioning strategy that some firms use to distinguish their products from those of competitors.DHD2011 MKT243 Fundamental Of Marketing 29
  30. 30. Effective Positioning 1. Assess the positions occupied by competing products 2. Determine the dimensions of these positions 3. Choose an effective market positionDHD2011 MKT243 Fundamental Of Marketing 30
  31. 31. Perceptual Mapping A means of displaying or graphing in two or more dimensions the location of products, brands or groups of products in customers’ mindsDHD2011 MKT243 Fundamental Of Marketing 31
  32. 32. Perceptual MappingDHD2011 MKT243 Fundamental Of Marketing 32
  33. 33. Perceptual MappingDHD2011 MKT243 Fundamental Of Marketing 33
  34. 34. Positioning Bases Product Attributes/benefit Price and quality Use or application Product user Product class Competitor EmotionDHD2011 MKT243 Fundamental Of Marketing 34