Bmgt 411 chapter_7


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bmgt 411 marketing management fall 2014 chris lovett

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Bmgt 411 chapter_7

  1. 1. BMGT 411: Chapter 7 Identifying Market Segments and Targets
  2. 2. Who is the Target Segment?
  3. 3. Who is the Target Segment?
  4. 4. Who is the Target Segment?
  5. 5. Chapter Questions • In what ways can a company divide a consumer or business market into segments? • How should a company choose the most attractive target markets? • What are the different levels of market segmentation?
  6. 6. Effective Targeting Requires… • 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
  7. 7. Segmenting, Targeting, and Positioning (STP)
  8. 8. What is a Market Segment? A market segment consists of a group of customers who share a similar set of needs and wants.
  9. 9. Segmenting Consumer Markets Geographic Demographic Psychographic Behavioral
  10. 10. Geographic Segmentation
  11. 11. Demographic Segmentation • Age and life cycle • Life stage • Gender • Income • Generation • Social class • Race and Culture
  12. 12. Demographic Cohorts
  13. 13. Gen Y Cohort Analysis
  14. 14. Be Careful Not to be too explicit in marketing….. millennial-generation-soup-campaign
  15. 15. AARP What demographic segment is most important?
  16. 16. Lululemon What demographic segment is most important?
  17. 17. Mercedes Benz What demographic segment is most important?
  18. 18. Psychographic Segmentation 
 and The VALS Framework http:// www.strategicbusinessinsights.c om/vals/ustypes.shtml
  19. 19. Behavioral Segmentation Based on Needs and Benefits Initiator Influencer Decider Buyer User
  20. 20. Behavioral Segmentation: Behavioral Variables 1.Occasions: Time of day, week, month, year, or other defined time in a consumers life • Ex: Sheetz Breakfast 2.User Status: Non users, ex users, potential users, first time users, regular users !
  21. 21. Behavioral Segmentation: Behavioral Variables 3.Usage Rate: Light, Medium, and Heavy Product Users 4.Buyer Readiness Stage: Unaware, aware, informed, interested, desire, and intention to buy 5.Loyalty: • Hard Core Loyal's: Always buy one brand • Split Loyal's: Loyal to two or three brands • Shifting Loyal's: Shift from one brand to another • Switchers: Not loyal to any brand
  22. 22. Behavioral Segmentation: Behavioral Variables • Hard Core Loyal Examples: • Split Loyal's Example: • Shifting Loyal Examples: • Switchers Examples: ! • Enthusiastic Brands • Positive Brands • Indifferent Brands • Negative Brands • Hostile Brands
  23. 23. Effective Segmentation Criteria • Measurable: The size, purchasing power, and characteristics of the segment can be measured • Substantial: A segment is large and profitable enough to serve • Accessible: The segments can be effectively reached and served • Differentiable: Distinguishable and respond differently to different marketing mix elements • Actionable: Affective programs can be developed for attracting and serving these segments
  24. 24. Porter’s 5 Forces Model Threat of Rivalry Threat of Supplier Bargaining Power Threat of Buyer Bargaining Power Threat of New Entrants Threat of Substitutes
  25. 25. Figure 7.3 Possible Levels 
 of Segmentation