This document provides an overview of market segmentation, targeting, and positioning. It defines key terms like market, target market, consumer and business products. It describes how markets can be segmented geographically, demographically, psychographically, and based on product attributes. Specific geographic segmentation criteria covered include cities, metropolitan areas, and geographic information systems. Demographic segmentation variables discussed include age, gender, ethnicity, income, family lifecycle, and household type. The document also outlines several psychographic profiling systems and how psychographic segmentation can be used globally.

1. Chapter 5
(Market Segmentation, Targeting, and Positioning)
Leader: De Roxas, Angelie S.
Members: Ramilo, John Gil O.
Magbuhos, Jojie
Martinez, Jho-ann

2. MARKET
Segmentation, Targeting,
And Positioning
De Roxas, Angelie S.
BSBA F&MA IV-B

3. Market
Group of people with sufficient purchasing
power, authority and willingness to buy.

4. Target Market
Specific group of people a firm believes is
most likely to buy its goods and services.

5. Types of Products
• Consumer Products
Products bought by ultimate
consumers for personal use.
• Business Products
Goods
and
services
purchased for use either directly
or indirectly in the production of
other goods and services for
resale.

6. Market Segmentation
Division of the total market into smaller,
relatively homogenous groups.

7. Criteria for effective segmentation
 Segment must have measurable purchasing power
and size.
 Marketers must find a way to promote and serve the
market.
 Marketers must identify segments large enough for
profit potential.
 Firm must target a number of segments that match its
marketing capabilities.

8. Segmenting Consumer Markets
Geographic, Demographic, Psychographic,
and Product-related segmentation

9. Geographic Segmentation
Divides the over-all market into homogenous
groups according to population locations.

10. • Core Based Statistical Area (CBSA)
Collective term for metropolitan and micropolitan statistical
areas.
• Metropolitan Statistical Area (MSA)
Free standing urban area with a population in the urban center of
at least 50,000 and a total MSA population of 100,000 or more.
• Micropolitan Statistical Area
Area with at least one town of 10,000 to 49,999 with
proportionally few of its residents commuting to outside the
area.
• Consolidated Metropolitan Statistical Area (CMSA)
Urban area that includes two or more PMSAs.
• Primary Metropolitan Statistical Area (PMSA)
Urbanized county or set or counties with social and economic ties
nearby areas.

11. Ten Most Populous Cities in the Philippines
City
Population
Quezon City
The capital of the Philippines from 1948 to 1976. Has close to three million people
Manila
The current capital of the Philippines. Very densely populated with close to two million
people
Located north of Manila. Has close to 1.5 million people
Caloocan
Davao City
Located on the island of Mindanao. Has close to 1.4 million people.
Cebu City
The first capital of the country. Located on a large island in the Visayas
"The Queen City of the South“. Has close to a million people
Zamboanga City
Located on the island of Mindanao. Has close to 800,000 people
Antipolo
Located on the hills east of Manila . Has close to 700,00 people
Pasig
Now part of Metropolitan Manila area. Has close to 650,000 people
Taguig
On the western shores of Laguna de Bay. Has close to 620,000 people
Valenzuela
Has close to 580,000 people. Northern part of Metropolitan Manila area

12. • Geographic Information Systems (GISs)
Software packages that assemble, store,
manipulate and display data by their location.

13. Demographic Segmentation
Division of an over-all market into
homogenous groups based on variables
such as gender, age, income, occupation,
education, sexual orientation household
size, and stage in the family life cycle;
also called socioeconomic segmentation.

14. Segmenting by Gender

15. Segmenting by Age

16. School Age Children

17. Tweens and Teens

18. Generation X
The group born between 1968 and 1979,
now generally in their early 30’s to early 40’s.

19. Baby Boomers
Those born between 1946 and 1964.

20. Seniors

21. End

22. Ramilo, John Gil O.
BSBA F&MA IV-B

23. COHORT EFFECT: VIDEO GAME GENERATION
Cohort effect is the tendency of members of a generation to be
influenced and bound together events occurring during their key
formative years. These events help define the core values of the age
group and eventually shape consumer preferences and behavior.
For seniors, the events would be the great depression, World
War II, and Korea because many were in this age bracket at that time.
Later groups were influenced by the Cold War, Vietnam mar and other
wars.
The current cohort may be the most integrated to date.
Marketers have called this group Generation Y, Generation Next, and
Echo Boomers. Some called it the 9-11 Generation.

24. Years passed and there came the development of Video Games.
And they called it Video Game Generation.
Members of this cohort are highly visual and are generally
comfortable with all forms of technology. They gravitate to activities that
provide constant entertainment and immediate gratification.
The significance of cohort effect for marketers lies in
understanding the general characteristics of the Video Game Generation
as it corresponds to its life-defining events. The social and economic
influences this generation experiences help form members long term
beliefs and goals in life.

25. Segmenting by Ethnic Groups
Three largest ethnic group in U.S:
Asian
African Americans
Hispanics (Latin Americans)

26. Hispanics
Currently the largest
racial/ethnic minority
group in the United
States. They have a rising
rate of buying power
which is estimated to
$1 trillion.

27. African Americans
Like Hispanics, they are
also one of the largest
ethnic group in U.S.
This group now has an
estimated $1.08 trillion
in buying power.

28. Asian Americans
They make up
smaller segment than
either African Americans
or Hispanics. They serve
as an attractive target
for marketers because
they have the fastestgrowing income.

29. Three largest ethnic group in the Philippines
Visayan
Ilocano
Tagalog

30. Native Americans
Another important minority group is native Americans,
whose current population numbers over 5 million or 1.7% of the
total U.S population. Aside from their growing population growth,
Native American Business are growing. In the recent year almost
237,000 non- farm Native American firms are operated in U.S , with
$34.4 billion in receipts.

31. People of Mixed Race
U.S residents completing census forms now have the option of
identifying themselves as belonging to more than one racial category.
According to their census. About 9million U.S residents classify themselves
this way and marketers need to be aware of this change.
Forward –thinking marketers should keep tabs on this group,
identifying their needs and preferences.

32. Segmenting by Family Lifecycle Stages
Family Lifecycle is the process of family formation and dissolution.
As people move from one life stage to another, they become potential
consumers for different types of goods and services.

33. Families typically spend the most during the years their children are
growing- on everything including housing, clothing, braces, and college. They
often look to obtain value wherever they can.
Marketers can create
customer loyalty within
this group by giving them
the best possible value.

34. Once children are on their own
– or at least off to college – married
couples enter the “ empty nest” stage.
Empty nesters may have the disposable
incomes necessary to purchase premium
products once college tuitions and
mortgages are paid off. They may treat
themselves to luxurious things that they
cannot do or buy before because of
priorities.

35. Segmenting by Household Type
Today, Households embody a wade range of diversity. They include:
- Households with married couple and their children
- Households blended through divorce or loss of spouse and
remarriage
- Those headed by single parent
- Same-sex parents
- Couples without children
- Groups of friends
- Single-person households

36. Segmenting by Income and Expenditure Patterns
Engel’s Law
Over a century ago, Ernst Engel, a German Statistician, published
to what became known as Engel’s law. According to him, as household
income increases,
•
A smaller percentage of expenditures goes for food
•
The percentage spent on housing, household operations, and
clothing remain constant
•
The percentage spent on their items (such as recreation and
education) increases

37. Demographic Segmentation Abroad
Marketers often face a difficult task in obtaining the data necessary
for demographic segmentation abroad. Many countries do not schedule
census programs. Similarly, family lifecycle data are difficult to apply in global
demographic segmentation efforts.

38. End

39. Psychographic
Segmentation:
dividing a population into groups
that have similar psychological
characteristics, and lifestyles.
Magbuhos, Jojie
BSBA F&MA IV-B

40. AIO statements Items on
lifestyle surveys that describe various activities,
interest, and respondents’ opinions.

41. VALS- Values and
LifeStyles
VALS segmentation system
that divides consumers into eight
psychographic categories:

42.  Innovators
 Thinkers
 Achievers
 Experiencers
 Believers
 Strivers
 Makers
 Survivors

43. Thinkers —mature, satisfied, comfortable, well informed
Achievers —goal oriented, conservative, predictable,
stable
Experiencers —young, enthusiastic, seek variety and
excitement
Believers —conservative, conventional, moral codes, in
organizations
Strivers —trendy, fun loving, seek approval, job vs.
career
Makers —practical, self sufficient, suspicious of large
institutions
Survivors —few resources, concerned with safety, low
motivation

44.  Principle-motivated consumers
 Achievement-motivated consumers
 Action-motivated consumers

45. Psychographic
Segmentation of Global
Markets
Strivers
Devouts
Altruists
Intimates
Fun seekers
Creatives

46. Using Psychographic
Segmentation
Psychographic segmentation is a
good supplement to segmentation by
demographic or geographic variables

47. Product-Related
Segmentation
Division of a population into homogeneous
groups based on their relationships to a product
Segmenting based on the benefits people seek
when they buy a product
Segmenting based on usage rates for a
product; or
Segmenting according to consumers brand
loyalty toward a product

48. Segmented by
Benefits Sought
This approach focuses on attributes
people seek and benefits they expect to
receive from a good or service

49. Segmented By Usage
Rates
Marketers may also
segment a total market by
grouping people according to
the amounts of a product they
buy and use.

50. 80/20
principle
Generally accepted rule that 80
percent of a product’s revenues
come from 20 percent of its
customers.
Praedo’s
Law

51. Segmented by Brand
Loyalty
A third product-related
segmentation methods groups
consumers according to the
strength of the brand loyalty they
feel toward a product.

52. End

53. THE MARKET
SEGMENTATION
PROCESS
Martinez, Jho-ann
BSBA F&MA IV-B

54. Management -driven methods
Segments are predefined by
managers based on their observation
of the behavioural and demographic
characteristics of likely users.
Market-driven method
Segments are defined by asking
customers for the attributes important
to them.

55. FOUR STAGE
PROCESS

56. 1. Develop a relevant profile for
each segment
•
The process must identify the
characteristics that both explain the
similarities among customers within
each segment and account for
differences among each segment.

57. The task at this stage is to develop a
profile of the typical customer in
each segment such as:
1.information about lifestyle patterns
2.attitude toward product attributes and brands
3.product use habits
4.geographic locations
5.and demographic characteristics

58. 2. Forecast market potential
• In the second stage market
segmentation and market opportunity
analysis combine to produce a
forecast of market potential within
each segment. Market potential sets
the upper limit on the demand
competing firms can expect from a
segment.

59. For example, In deciding whether to
market a new product to teens,
electronics firms need to determine
the demand for it and the disposable
income of that group.
This step should define a preliminary go or nogo decision from management because the
total sales potential I each segment must
justify resources devoted to further analysis.

60. 3. Forecast probable market
share
• Competitor’s positions in targeted
segments must be analyzed, and a
specific marketing strategy must be
designed to reach these segments.
A firm determine the expected level of
resources it must commit, that is, to tap
the potential demand in each segment.

61. 4. Select specific market
segments
• At this point in the analysis, market
weighs more than monetary costs and
benefits; they also consider many
difficult-to-measure but critical
organizational and environmental
factors

62. STRATEGIES FOR REACHING
TARGET MARKETS

63. FOUR BASIC STRATEGIES FOR
ACHIEVING CONSUMER
SATISFACTION
•
•
•
•
Undifferentiated marketing
Differentiated marketing
Concentrated marketing
micromarketing

64. 1. Undifferentiated marketing
• Strategy that focuses on producing a
single product and marketing it to all
customers; also called mass marketing
• More common in the past than it is
today.

65. 2. Differentiated marketing
• Strategy that focuses on producing
several products and pricing, promoting,
and distributing them with different
marketing mixes designed to satisfy
smaller segments.
• A company can produce more sales by
following a differentiated marketing than
a differentiated marketing would
generate.

66. Differentiated marketing also
raises costs.
• Production costs usually rise because
additional product and variations require
shorter production runs and increased set
up times.
• Inventory costs rise because more
products require added storage space
and increased efforts for record keeping.
• Promotional costs also rise because each
segment demands a unique promotional
mix.

67. 3. Concentrated marketing
(niche marketing)
• Focusing marketing efforts on
satisfying a single market segment.
• This approach can appeal to a small
firm lacking the financial resources of
its competitors and to a company
offering a highly specialized goods
and services.

68. 4. Micromarketing
• Targeting potential customers at very narrow, basic
levels, such as by zip code, specific occupation or
lifestyle—possibly even individuals themselves.
• But micromarketing like niche marketing, can
become too much of a good thing if companies
spend too much time, efforts and marketing dollars
to unearth a market too small and specialized to be
profitable. In addition micromarketing may cause a
company to lose sight of other , larger markets.

69. SELECTING AND EXECUTING
A STRATEGY

70. Basic determinants of a marketspecific strategy:
•
•
•
•
Company resources
Product homogeneity
Stage in the product life cycle
Competitor’s strategies

71. Positioning
• Placing a product at a certain point or
location within a market in the minds
of prospective buyers

72. Positioning map
• Tool that help marketers place
products in a market by graphically
illustrating consumer’s perceptions of
competing products within an industry.

73. Repositioning
• Changing the position of a product
within the minds of prospective buyers
relative to the positions of competing
products.

74. END