Market Segmentation and Targeting Strategies
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This document discusses market segmentation and target markets. It defines a market and explains that segmentation is important because demand is often heterogeneous. It then defines market segmentation as dividing the total market into smaller segments. Several types of segmentation variables are described such as demographic, geographic, psychographic, and benefits-sought segmentation. Demographic variables like age, income level, family, education, and ethnicity are discussed in more detail. The document also covers target marketing, describing it as a set of buyers who share common needs. It outlines the steps in the target marketing process and discusses strategies for reaching target markets like undifferentiated, differentiated, concentrated, and micro marketing.
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Market Segmentation and Targeting Strategies
- 1. Market Segmentation and Target Markets Harcourt, Inc.
- 2. NAME: KALAIVAANI D/O JAYARAMAN ID NOM: ST1302BD2477 PRINCIPLES OF MARKETING LECTURER: MR. KOE SWEE AUN
- 3. Dr. Rosenbloom What is a market? Individuals or organizationsIndividuals or organizations who:who: Are willing, able, and capable ofAre willing, able, and capable of purchasing a firm’s productpurchasing a firm’s product Segmentation is critical becauseSegmentation is critical because demand is often heterogeneousdemand is often heterogeneous
- 4. Dr. Rosenbloom What is market segmentation? Market SegmentationMarket Segmentation o Divide the total market intoDivide the total market into smaller segmentssmaller segments
- 5. A market segment should be : Measurable Accessible by communication and distribution channels Different in its response to a marketing mix Durable and not changing too quickly Substantial enough to be profitable
- 7. Dr. Rosenbloom FamilyFamily Income LevelIncome Level EthnicityEthnicityEducationEducation AgeAge Demographic Segmentation
- 8. Dr. Rosenbloom Demographic Segmentation AgeAge Some products areSome products are marketed tomarketed to specific agespecific age groupsgroups
- 9. Dr. Rosenbloom Demographic Segmentation Income LevelIncome Level Some products areSome products are marketed tomarketed to consumers withconsumers with different incomedifferent income levelslevels
- 10. Dr. Rosenbloom Demographic Segmentation FamilyFamily Some products areSome products are marketed tomarketed to consumers withconsumers with special familyspecial family considerationconsideration • Family Life Cycle • Bachelor, marriage, married with children, retired, etc.
- 11. Dr. Rosenbloom Demographic Segmentation EducationEducation Some products areSome products are marketed tomarketed to consumers withconsumers with certain educationalcertain educational levelslevels
- 12. Dr. Rosenbloom Demographic Segmentation EthnicityEthnicity Some products areSome products are marketed tomarketed to consumers fromconsumers from specific ethnicspecific ethnic backgroundsbackgrounds
- 13. Dr. Rosenbloom Geographic Segmentation When an organization localizes itsWhen an organization localizes its marketing efforts to accommodate themarketing efforts to accommodate the unique needs of specific geographicunique needs of specific geographic regionsregions
- 14. PampersPampers This ad is anThis ad is an example ofexample of geographicgeographic segmentation.segmentation. When visiting theWhen visiting the web site look for theweb site look for the different countriesdifferent countries Pampers markets to.Pampers markets to.
- 15. Dr. Rosenbloom Psychographic Segmentation Grouping customers togetherGrouping customers together based on social class,based on social class, lifestyles and psychologicallifestyles and psychological characteristics (attitudes,characteristics (attitudes, interests and opinionsinterests and opinions
- 16. Criteria for Effective Segmentation Market segmentation cannot be used in allMarket segmentation cannot be used in all cases. To be effective, segmentation must meetcases. To be effective, segmentation must meet the following basic requirements.the following basic requirements. The market segments must be measurable inThe market segments must be measurable in terms of both purchasing power and size.terms of both purchasing power and size. Marketers must be able to effectivelyMarketers must be able to effectively promote to and serve a market segment.promote to and serve a market segment. Market segments must be sufficiently largeMarket segments must be sufficiently large to be potentially profitable.to be potentially profitable. The number of segments must match theThe number of segments must match the firm’s capabilities.firm’s capabilities.
- 17. MARKET TARGETING Consists of a set of buyers who shareConsists of a set of buyers who share common needs or characteristics that thecommon needs or characteristics that the company decides to serve.company decides to serve.
- 18. Target Marketing Steps in the Targeting Process: Market Positioning Market Targeting Market Segmentation
- 19. Dr. Rosenbloom Target Marketing AdvantagesAdvantages Easier analysis of potential and actualEasier analysis of potential and actual consumersconsumers Tailoring of products to marketTailoring of products to market Assessment of demand potentialAssessment of demand potential Identify competing productsIdentify competing products Increased sales effectiveness and costIncreased sales effectiveness and cost efficienciesefficiencies Product positioning and easy identificationProduct positioning and easy identification of opportunitiesof opportunities
- 20. Dr. Rosenbloom Target Marketing DisadvantagesDisadvantages Increased marketing costsIncreased marketing costs Personalization can becomePersonalization can become burdensome to manageburdensome to manage Faux segmentation may be viewedFaux segmentation may be viewed cynicallycynically Narrow segmentation can impactNarrow segmentation can impact brand loyaltybrand loyalty Ethics and stereotyping issuesEthics and stereotyping issues
- 21. Strategies for Reaching Target Markets UndifferentiatedUndifferentiated MarketingMarketing Differentiated Marketing Concentrated Marketing MicroMicro marketingmarketing
- 22. 8-22 Undifferentiated marketing:Undifferentiated marketing: when awhen a firm produces only one product or productfirm produces only one product or product line and promotes it to all customers with aline and promotes it to all customers with a single marketing mixsingle marketing mix Sometimes called mass marketingSometimes called mass marketing Much more common in the pastMuch more common in the past Undifferentiated Marketing
- 23. 8-23 Differentiated marketing:Differentiated marketing: when awhen a firm produces numerous products andfirm produces numerous products and promotes them with a differentpromotes them with a different marketing mix designed to satisfymarketing mix designed to satisfy smaller segmentssmaller segments Tends to raise costsTends to raise costs Firms may be forced to practiceFirms may be forced to practice differentiated marketing to remaindifferentiated marketing to remain competitivecompetitive Differentiated Marketing
- 25. LunchablesLunchables Using aUsing a DifferentiatedDifferentiated MarketingMarketing StrategyStrategy
- 26. Concentrated marketing (nicheConcentrated marketing (niche marketing):marketing): when a firm commits all ofwhen a firm commits all of its marketing resources to serve a singleits marketing resources to serve a single market segmentmarket segment Attractive to small firms with limitedAttractive to small firms with limited resources and to firms offering highlyresources and to firms offering highly specialized goods and servicesspecialized goods and services Concentrated Marketing
- 27. Micromarketing:Micromarketing: involvesinvolves targeting potential customerstargeting potential customers at a very basic level, such asat a very basic level, such as by ZIP code, specificby ZIP code, specific occupation, lifestyle, oroccupation, lifestyle, or individual householdindividual household The Internet may allowThe Internet may allow marketers to makemarketers to make micromarketing evenmicromarketing even more effectivemore effective GeneSolutionsGeneSolutions targeting atargeting a specific occupationspecific occupation