Marketing

1. 1
Marketing
Segmentation & Targeting

2. 2
Business Types
• Generally there are two types of businesses
that an organization can be involved in:
• Business to Consumer (B2C)
• Business-to-business (B2B)

3. 3
Mass Marketing
• mass marketing Using almost the same
product, promotion and distribution for all
consumers.

4. 4
Segmenting Markets
• Adapting a company's offerings so they more
closely match the needs of one or more segments.
• A company that practices segment marketing
recognizes that buyers differ in their needs and
wants.

5. © Ahmed El-Tagy, RITI-Cairo 2011 5
Steps in Market Segmentation, Targeting, and Positioning
1. Identify
segmentation
variables and
segment the
market
2. Develop
profiles of
resulting
segments
Market
Segmentation
3. Evaluate
attractiveness
of each segment
Based on Ability
4. Select the
target
segment(s)
Market
Targeting
5. Identify
possible
positioning
concepts for
each target
segment
6. Select,
develop, and
communicate
the chosen
positioning
concept
Market
Positioning

6. 6
• Dividing a market into smaller segments of
buyers with distinct needs, characteristics, or
behaviors that might require separate marketing
strategies or mixes.
Segmentation

7. 7
Benefits of Market Segmentation
• More fine-tuned product or service offer and
price it appropriately for the target audience.
• The choice of distribution channels and
communication channels becomes much
easier.
• facing fewer competitors.

8. 8
Benefits of Market Segmentation
• Exploit the market better by selecting market
niches (suitable segments) that are compatible
with its resources.
• Focusing strategies more sharply on target
groups.
• Increase customers’ loyalty since the firm’s
offering is better matched to those in the
segment.

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Bases for Segmenting Consumer Markets
• There is no single way to segment a market.
• A marketer has to try different segmentation
variables, alone and in combination, to find
the best way to view the market structure.

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Segmentation Variables
• Geographical Segmentation:
-Dividing the market into different geographical
units such as nations, states, regions, countries,
cities or neighborhoods.
-localizing the products, advertising, promotion,
and sales efforts to fit the needs of individual
regions, cities, and even neighborhoods.

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Segmentation
• Demographic Segmentation
• Dividing the market into groups based on variables
such as: age, gender, family size, family life cycle,
income, occupation, education, religion, race and
nationality.
• most popular bases for segmenting customer
groups.
• Consumer needs, wants, and usage rates often
vary closely with demographic variables.

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• Demographic Segmentation
• Demographic variables are easier to measure
than most other types of variables.

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Segmentation
• Psychographic Segmentation
• Dividing buyers into different groups based on
social class, life styles or personality
characteristics.
• People in the same demographic group can have
very different psychographic make-ups such as:

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Social Class:
Relatively permanent and ordered divisions in a society
whose members share similar values, interests, and behavior.
- Social class is not determined by a single factor, but is
measured as a combination of:
- Occupation
- Income
- Education
- Wealth
- Other variables
• Mostly used (A,B,C) or (Upper,
middle, low)

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Lifestyle:
A person’s pattern of living as experienced in his or her
activities interests and opinion.
• Sometimes people in the same social class have
different life styles.
• It involves measuring the customer major AIO
dimensions

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Personality:
The unique psychological characteristics that
distinguish a person or a group
- Personality is usually described in terms of traits such
as: Self-confidence, Dominance, Sociability,
Defensiveness, Aggressiveness,…
- The idea is that brands also have personalities and
consumers are likely to choose brands with
personality that matches their own.
- Apple  Excitement
- Gucci  Class and sophistication

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Segmentation
• Behavioral Segmentation
-Dividing buyers into groups based on
their knowledge, attitudes, uses, or
responses to a product.
-Many marketers believe that behavioral
variables are the best starting point for
building market segments.

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• Behavioral Segmentation
• Occasions : when buyers get the idea to buy, actually
make their purchase, or use the purchased item.
• Benefits Sought :group buyers according to the
different benefits that they seek from the product.
• User Status :nonusers, ex-users, potential users, first-
time users, and regular users of a product.
• Usage Rate :light, medium, and heavy-user groups.
• Attitude Towards Product : enthusiastic, positive,
indifferent, negative or hostile about a product.

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Segmentation for businesses
(B2B Segmentation)
• Kind of business: Manufacturer, retailers, banks
wholesalers, hospitals and schools.
• Position on business life cycle.
• Buying motivation.
• Location(s)
• Structure (corporation, partnership, sole proprietor).
• Sales volume.
• Distribution patterns.
• Number of employees.

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MULTIVARIABLE SEGMENTATION
HIGH
INCOME
YOUNG
FAMILIES
LOW
INCOME
YOUNG
FAMILIES
HIGH
INCOME
OLDER
FAMILIES
LOW
INCOME
OLDER
FAMILIES
HIGH
INCOME
RETIRED
LOW
INCOME
RETIRED

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Conditions for Effective Segmentation
1. Measurability: The size, purchasing power and profiles of
the segments should be measurable.
2. Accessibility: The market segments should be effectively
reached and served.
3. Sustainability: The market segments should be large or
profitable enough to be served.
4. Differentiable: the segments are conceptually distinguishable
and respond differently to different marketing mix elements
5. Actionable: Effective programs can be designed for attracting
and serving the segments.

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Niche Marketing
• Adapting a company's offerings to more
closely match the needs of one or more
subsegments where there is often little
competition.
• Niche marketing focuses on subgroups within
the segments.

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• Micro Marketing A form of target marketing in
which the company tailor their marketing
programs to the needs and wants of narrowly
defined geographic, demographic,
psychographic or behavioral segments.
• individual marketing Tailoring products and
marketing programs to the wants and,
preferences of individual customers.

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Market Targeting
• The process of evaluating each market
segment's attractiveness and selecting one or
more segments to enter.
• Marketing segmentation reveals the firm's
market-segment opportunities. The firm now
has to evaluate the various segments and
decide how many and which ones to target.

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Market Targeting
• In evaluating different market segments, a
firm must look at two dimensions:
1. segment attractiveness.
2. company fit.

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Market Targeting
1. Segment Attractiveness: (Opportunity)
• current sales value, projected sales-growth rates
and expected profit margins for the various
segments.
• Segments with the right size and growth
characteristics are interesting.
• The largest, fastest-growing segments are not
always the most attractive ones for every
company.

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Market Targeting
• Smaller companies may find that they lack the
skills and resources needed to serve the larger
segments, or that these segments are too
competitive.
• Such companies may select segments that are
smaller and less attractive, in an absolute
sense, but that are potentially more profitable
for them.

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Market Targeting
2 . Company fit (Ability):
• The company must consider its objectives and
resources for that segment.
• It is best to discard some attractive segments
quickly because they do not match with the
company's long-run objectives.

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• Mars has the technology and brands that
stretched well into ice-cream, but it did not have
freezers in shops.
• Freezers are usually owned by Unilever's Walls or
Nestle's Lyons Maid, both experts in frozen food,
which bad no reason to let Mars in.
• Mars' unique products and valued reputation
allowed it to gain market share against
established competitors.
International example: Mars Ice cream

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Thank You