Summary of Marketing Management, 11Ed. Chapter 8

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Phil Kotler, Kevin Keller and Abraham Koshy

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Summary of Marketing Management, 11Ed. Chapter 8

  1. 1. logo copy.tif Mass Marketing: The seller engages in mass production, mass distribution and mass promotion of one product for all buyers Identifying Market Segments and Targets Chapter 8 Marketing Management By Philip, Kevin Lane Keller, Abraham Koshy, Mithileshwar Jha SUMMARY by This chapter deals with one of the quintessential concepts of Marketing: Segmentation, Target and Positioning. It explains different levels of Market Segmentation, bases for Segmenting Consumer Markets, choosing target Markets & finally analyses the various requirement for effective segmentation. Steps in market segmenta 1. Market Segmentation 2. Target Marketing 3. Market Positioning Levels of Market Segmentation: Micromarketing A. Segment marketing characteristics, or wants who might require separate products or marketing mixes. Segment Marketing offers key benefits over Mass Marketing as the company can offer better design, price, disclose better reflect competitors marketing. B. Niche Marketing distinctive mix of benefits. Marketers usually define niches by dividing segments into sub segments. For e.g. Ezee, the liquid detergent from Godrej is a fabric washing product for woolen clothes. Identifying Market Segments Marketing Management By Philip, Kevin Lane Keller, Abraham Koshy, Mithileshwar Jha SUMMARY by This chapter deals with one of the quintessential concepts of Marketing: Segmentation, Target and Positioning. It explains different levels of Market Segmentation, bases for Segmenting Consumer Markets, choosing target Markets & finally analyses the various requirement for effective segmentation. Steps in market segmentation, targeting and positioning •Identify bases for segmenting the market •Develop segment profiles 1. Market Segmentation •Develop measure of segment attractiveness •Select target segments 2. Target Marketing •Develop positioning for target segments •Develop a marketing mix for each segment 3. Market Positioning Levels of Market Segmentation: Micromarketing Segment marketing: Dividing a market into distinct groups with distinct needs, characteristics, or wants who might require separate products or marketing mixes. Segment Marketing offers key benefits over Mass Marketing as the company can offer better design, price, disclose and also can fine better reflect competitors marketing. Niche Marketing: A niche is a more narrowly defined customer group seeking a distinctive mix of benefits. Marketers usually define niches by dividing segments into egments. For e.g. Ezee, the liquid detergent from Godrej is a fabric washing product for woolen clothes. Marketing Management By Philip, Kevin Lane Keller, Abraham Koshy, Mithileshwar Jha This chapter deals with one of the quintessential concepts of Marketing: STP i.e. Segmentation, Target and Positioning. It explains different levels of Market Segmentation, bases for Segmenting Consumer Markets, choosing target Markets & finally analyses the tion, targeting and Identify bases for segmenting the market Develop segment profiles Develop measure of segment attractiveness Select target segments Develop positioning for target segments Develop a marketing mix for each segment Levels of Market Segmentation: Micromarketing Dividing a market into distinct groups with distinct needs, characteristics, or wants who might require separate products or marketing mixes. Segment Marketing offers key benefits over Mass Marketing as the company can and also can fine-tune the marketing program to is a more narrowly defined customer group seeking a distinctive mix of benefits. Marketers usually define niches by dividing segments into egments. For e.g. Ezee, the liquid detergent from Godrej is a fabric washing
  2. 2. Chapter 8 - Identifying Market Segments and Targets C. Local Marketing: needs and wants of local customer groups in trading areas, neighborhoods and even individual stores is called as Local Marketing. E.g. Many Banks in Kerala have special ‘NRI Branches’ to cat abroad. D. Individual Marketing: one”,” customized marketing” or “one customers to de Paints retailers facilitate customers to mix and match colors of their choice from a catalogue. Bases for Segmenting Consumer Markets A. Geographic Segmentation: such as nations, cities, states, regions, neighborhoods etc • Region: South India, Western Region, North, East • City: Class • Rural, urban , semi urban areas B. Demographic Segmentation: age, family size, family life cycle, gender, income, occupation, education, religion etc. Demographic variables are easy to measure and are directly associated with customer needs and wants Stage1: Bachelorhood Stage2: Honeymooners Stage3: Parenthood Stage4:Post Stage5: Solitary Survivor(SS) C. Psychographic Segmentation: basis of psychological/personality traits, lifestyles or values. • Lifestyle: done on three parameters: • Personality: D. Behavioral segmentation: attitude toward, use of, or response to a product. The behavioral variables are as follows: Identifying Market Segments and Targets Local Marketing: Target marketing that involves marketing programs tailored to the needs and wants of local customer groups in trading areas, neighborhoods and even individual stores is called as Local Marketing. E.g. Many Banks in Kerala have special ‘NRI Branches’ to cater to the needs of customers whose relatives remit money from Individual Marketing: This is the ultimate level of marketing that leads to “segments of one”,” customized marketing” or “one-to-one marketing”. customers to design the product and service offering to their choice. For e.g. Asian Paints retailers facilitate customers to mix and match colors of their choice from a catalogue. Bases for Segmenting Consumer Markets Geographic Segmentation: Division of the Market into different geographical Units such as nations, cities, states, regions, neighborhoods etc Region: South India, Western Region, North, East City: Class-I cities, class-II cities, Metro cities etc Rural, urban , semi urban areas Demographic Segmentation: The market is divided on the basis of variables such as age, family size, family life cycle, gender, income, occupation, education, religion etc. Demographic variables are easy to measure and are directly associated with customer needs and wants FAMILY LIFE CYCLE STAGES •Single,Focus of expenditure on selfStage1: Bachelorhood •Young married couple without kids,focus on building home and relation Stage2: Honeymooners •Full Nest-I,1 child less than 6 yrs old •Full Nest-II,youngest child under 6 •Full Nest-III: all adult children Stage3: Parenthood •Children not living with parents •Empty Nest1 :Working •Empty Nest2: Not Working Stage4:Post-ParentHood •One spouse dies •SS-I: Working •SS-II: Not Working Stage5: Solitary Survivor(SS) Psychographic Segmentation: Here buyers are divided into different groups on the basis of psychological/personality traits, lifestyles or values. Lifestyle: Culture-oriented, sports oriented, outdoor oriented. Classification is done on three parameters: AIO-Activities, Interests and Opinions. Personality: Compulsive, gregarious ,authoritarian ,ambitious Behavioral segmentation: Buyers are divided on the basis attitude toward, use of, or response to a product. The behavioral variables are as Identifying Market Segments and Targets Target marketing that involves marketing programs tailored to the needs and wants of local customer groups in trading areas, neighborhoods and even individual stores is called as Local Marketing. E.g. Many Banks in Kerala have special er to the needs of customers whose relatives remit money from This is the ultimate level of marketing that leads to “segments of one marketing”. Customerization empowers sign the product and service offering to their choice. For e.g. Asian Paints retailers facilitate customers to mix and match colors of their choice from a Bases for Segmenting Consumer Markets into different geographical Units such as nations, cities, states, regions, neighborhoods etc The market is divided on the basis of variables such as age, family size, family life cycle, gender, income, occupation, education, religion etc. Demographic variables are easy to measure and are directly associated with customer LIFE CYCLE STAGES Single,Focus of expenditure on self Young married couple without kids,focus on building I,1 child less than 6 yrs old II,youngest child under 6 III: all adult children Children not living with parents Empty Nest2: Not Working Here buyers are divided into different groups on the basis of psychological/personality traits, lifestyles or values. oriented, sports oriented, outdoor oriented. Classification is Activities, Interests and Opinions. Compulsive, gregarious ,authoritarian ,ambitious Buyers are divided on the basis of their knowledge of, attitude toward, use of, or response to a product. The behavioral variables are as
  3. 3. • Usage Rate: • Loyalty Status: • Readiness Stage: buy • Attitude towards Product: Requirements for Effective Segmentation Chapter 8 - Identifying Market Segments and Targets Evaluating and Selecting Market Segments Five patterns of target market selection that can be followed are: • Single Segment Concentration strong knowledge of segments needs and acquires a strong market presence • Selective Specialization attractive and appropriate, there may be little or no synergy between the segme • Product Specialization: different market segments. • Market Specialization: customer. • Full Market Coverage: products they may need. E.g. Coca Cola (non (Software Market) etc. P = Product M = Market Usage Rate: Light, Medium, Heavy Loyalty Status: None, medium, strong, absolute Readiness Stage: Unaware, aware, informed, interested, desirous, intending to buy Attitude towards Product: Enthusiastic, positive, indifferent, negative, hostile Requirements for Effective Segmentation Identifying Market Segments and Targets Evaluating and Selecting Market Segments Five patterns of target market selection that can be followed are: Single Segment Concentration: Concentrated Marketing strong knowledge of segments needs and acquires a strong market presence Selective Specialization: a firm selects a number of segments. Each objectively attractive and appropriate, there may be little or no synergy between the segme Product Specialization: The firm makes a certain product that it sells to several different market segments. Market Specialization: The firm concentrates on serving many needs of a particular customer. Full Market Coverage: The firm attempts to serve a products they may need. E.g. Coca Cola (non-alcoholic beverage segment), Microsoft (Software Market) etc. P = Product M = Market med, interested, desirous, intending to Enthusiastic, positive, indifferent, negative, hostile Requirements for Effective Segmentation Identifying Market Segments and Targets Evaluating and Selecting Market Segments Five patterns of target market selection that can be followed are: : Concentrated Marketing where the firm gains a strong knowledge of segments needs and acquires a strong market presence : a firm selects a number of segments. Each objectively attractive and appropriate, there may be little or no synergy between the segments The firm makes a certain product that it sells to several The firm concentrates on serving many needs of a particular The firm attempts to serve all customer groups with all alcoholic beverage segment), Microsoft

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