Download to read offline
![Market Segmentation
Clearly, there are many ways to segment a market, but not all segmentations are
effective.
To be useful, market segments must be:
1. Measurable (the size, purchasing power, and profiles of the segments can be
measured)
2. Accessible (the market segments can be effectively reached and served)
3. Substantial (Segment size) (the market segments are large or profitable
enough to serve)
4. Differentiable (the segments are conceptually distinguishable and respond
differently to different marketing mix elements and programs [if married and
unmarried women respond similarly to a sale on perfume, they do not
constitute separate segments])
5. Actionable (effective programs can be designed for attracting and serving the
segments)
Requirements for Effective Segmentation
8](https://image.slidesharecdn.com/marketingstrategych2-250707082416-04741f91/75/Marketing-Stratsdsffdfdgdgfdegy-Ch-2-pptx-8-2048.jpg)
Marketing Stratsdsffdfdgdgfdegy Ch 2.pptx
- 1. Chapter 2 Market Segmentationand strategies 1
- 2. Market Segmentation (Dividingmarket into smaller groups with distinct needs, characteristics, or behaviors who might require separate products or marketing mixes) Market Targeting (The process of evaluating each market segment’s attractiveness and selecting one or more segments to enter) Differentiation (Actually differentiating the firm’s market offering to create superior customer value) Positioning (Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers) 2
- 3. Market Segmentation • Market segmentationis 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.
- 4.
- 5. We willdiscuss four important segmentation topics: 1. Segmenting consumer markets 2. Requirements for effective segmentation Market Segmentation 5
- 6.
- 7.
- 8. Market Segmentation Clearly, thereare many ways to segment a market, but not all segmentations are effective. To be useful, market segments must be: 1. Measurable (the size, purchasing power, and profiles of the segments can be measured) 2. Accessible (the market segments can be effectively reached and served) 3. Substantial (Segment size) (the market segments are large or profitable enough to serve) 4. Differentiable (the segments are conceptually distinguishable and respond differently to different marketing mix elements and programs [if married and unmarried women respond similarly to a sale on perfume, they do not constitute separate segments]) 5. Actionable (effective programs can be designed for attracting and serving the segments) Requirements for Effective Segmentation 8
- 9. Market Targeting Target market consists ofa set of buyers who share common needs or characteristics that the company decides to serve. Selecting Target Market Segments 9
- 10. Market Targeting • Segmentsize and growth – Current segment sales, growth rates and expected profitability for various segmentation. • The largest growing segments are not the most attractive one for every company, smaller companies may lack the skills and resources needed to serve the large segments. Such companies may target segments that are smaller and less attractive. 10
- 11. Market Targeting • Segmentstructural attractiveness – Competitors, Substitute products, Power of buyers and powerful suppliers. 1. competitors: segment will be less attractive if it contains many and tough competition. 2. Substitute products: the existence of many substitute products will lower the attractiveness of the segment. 3. Power of buyers: buyers with strong bargaining power relative to their sellers will lower segment attractiveness 4. Powerful suppliers negatively affect the segment attractiveness who can control prices, raw materials, reduce quality and quantity 11
- 12. Market Targeting • Companyobjectives and resources – companies should enter segments where it can offer superior value to customers and gain advantages over competitors. • Some attractive segments can be dismissed quickly because they do not engage with company’s long-run objectives. • The company may lack the skills and resources needed to succeed in attractive segment. 12
- 13. Market Targeting Target MarketingStrategies 13
- 14. Market Targeting Target MarketingStrategies 14
- 15. Market Targeting Undifferentiated fullMarket coverage marketing targets the whole market with one offer • Use the same strategy for all segments • Focusing on what is common rather than on what is different • Sometimes referred to as mass marketing and is trying to reach and influence the most people at one time Target Marketing Strategies 15
- 16. Market Targeting Differentiated marketingSelective specializing targets several different market segments and designs separate offers for each • Use different strategy for different audiences • Segments who have clear and distinguishable wants and needs • Goal is to achieve higher sales and stronger position • More expensive than undifferentiated marketing • Often includes allocating more resources to priority segments Target Marketing Strategies 16
- 17. Market Targeting Concentrated marketingniche – Single marketing targets a small share of a large market • Resources and efforts often concentrate on developing the ideal strategy for one or only a few segments • Limited company resources • Knowledge of the market • More effective and efficient • Referred to as niche marketing • Some segments are eliminated altogether Target Market Strategies 17
- 18. Marketing Targeting Micromarketing productspecializing or Marketing specializing is the practice of tailoring products and marketing programs to suit the tastes of specific individuals and locations – Local marketing – Individual marketing Target Market Strategies 18
- 19. Market Targeting Local marketinginvolves tailoring brands and promotion to the needs and wants of local customer groups – Cities – Neighborhoods – Stores Target Market Strategies 19
- 20. Market Targeting Individual marketinginvolves 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 Target Market Strategies 20
Editor's Notes
- #10 Note to Instructor Structural attractiveness includes factors that affect long-run attractiveness. These factors might include strong and aggressive competitors, substitute products, and high power of buyers or powerful suppliers.
- #11 Note to Instructor Structural attractiveness includes factors that affect long-run attractiveness. These factors might include strong and aggressive competitors, substitute products, and high power of buyers or powerful suppliers.
- #12 Note to Instructor Structural attractiveness includes factors that affect long-run attractiveness. These factors might include strong and aggressive competitors, substitute products, and high power of buyers or powerful suppliers.
- #18 Note to Instructor In slideshow view, click on movie icon to launch Meredith video snippet. See accompanying DVD for full video segment.
- #19 Note to Instructor Advances in communications technology have given rise to a new high-tech version of location-based marketing. By coupling mobile phone services with GPS devices, many marketers are now targeting customers wherever they are with what they want. This might include marketers reaching people near their stores, looking to make a decision. Discussion Question What are the drawbacks of local marketing? It can drive up manufacturing and marketing costs by reducing economies of scale. It can also create logistics problems as companies try to meet the varied requirements of different regional and local markets. Further, a brand’s overall image might be diluted if the product and message vary too much in different localities.
- #20 Note to Instructor Mass customization is the process through which firms interact one-to-one with masses of customers to design products and services tailor-made to meet individual needs. Has made relationships with customers important in the new economy. Provides a way to distinguish the company against competitors.