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Chapter 9 Identifying Market Segments and Selecting Target Markets PowerPoint by Karen E. James Louisiana State University - Shreveport ©2003 Prentice Hall, Inc. To accompany A Framework for Slide 1 in .Objectives  Learn how companies

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Chapter 9 Identifying Market Identifying Segments and Selecting Target Markets Target PowerPoint by Karen E. James Louisiana State University - Shreveport ©2003 Prentice Hall, Inc. To accompany A Framework for Slide 1 in
Objectives  Learn how companies identify the segments that make up a market.  Understand the criteria companies use to choose the most attractive market segments. ©2003 Prentice Hall, Inc. To accompany A Framework for Slide 2 in
Target Marketing  Target marketing requires marketers to take three major steps: – Market segmentation: Identifying and profiling distinct groups of buyers who differ in their needs and preferences. – Market targeting: Selecting one or more market segments to enter. – Market positioning: Establishing and communicating the key distinctive benefit(s) of the company’s market offering to each target. ©2003 Prentice Hall, Inc. To accompany A Framework for Slide 3 in
Using Market Segmentation  Mass marketing is losing popularity  Micromarketing can be undertaken at four levels: – Segment marketing – Niche marketing – Local marketing – Individual marketing ©2003 Prentice Hall, Inc. To accompany A Framework for Slide 4 in
Using Market Segmentation  Three patterns of preference segments are typically identified: – Homogeneous preferences – Diffused preferences – Clustered preferences ©2003 Prentice Hall, Inc. To accompany A Framework for Slide 5 in
Using Market Segmentation Needs-based Segmentation Process  Needs-based  Segment segmentation profitability  Segment  Segment identification positioning  Segment  Segment attractiveness “acid test”  Marketing-mix strategy ©2003 Prentice Hall, Inc. To accompany A Framework for Slide 6 in
Using Market Segmentation  Useful market segments share certain characteristics: – Measurable – Substantial – Accessible – Differentiable – Actionable ©2003 Prentice Hall, Inc. To accompany A Framework for Slide 7 in
Segmenting Consumer Markets Bases for  Nation or country Segmentation  State or region  Geographic  City or metro size  Demographic  Density  Psychographic  Climate  Behavioral ©2003 Prentice Hall, Inc. To accompany A Framework for Slide 8 in
Segmenting Consumer Markets  Age, race, gender Bases for  Income, education Segmentation  Family size  Family life cycle  Geographic  Occupation  Demographic  Religion, nationality  Psychographic  Generation  Behavioral  Social class ©2003 Prentice Hall, Inc. To accompany A Framework for Slide 9 in
Segmenting Consumer Markets Bases for  Lifestyle Segmentation – Activities – Interests  Geographic – Opinions  Demographic  Personality  Psychographic  Core values  Behavioral ©2003 Prentice Hall, Inc. To accompany A Framework for Slide 10 in
Segmenting Consumer Markets Bases for  Occasions Segmentation  Benefits  User status  Geographic  Usage rate  Demographic  Loyalty status  Psychographic  Buyer-readiness  Behavioral  Attitude ©2003 Prentice Hall, Inc. To accompany A Framework for Slide 11 in
Segmenting Consumer Markets  Multi-attribute segmentation via geoclustering combines multiple variables to identify smaller, better- defined target groups – PRIZM Geoclustering system uses demographic, geographic, lifestyle, and behavioral characteristics ©2003 Prentice Hall, Inc. To accompany A Framework for Slide 12 in
Segmenting Business Markets Bases for Segmentation  Operating  Situational variables factors  Purchasing  Personal approaches characteristics  Demographic variables ©2003 Prentice Hall, Inc. To accompany A Framework for Slide 13 in
Segmenting Business Markets  Rackman and Vincentis proposed a segmentation scheme that classifies business buyers into three groups: – Price-oriented customers: best served via transactional selling – Solution-oriented customers: best served by means of consultative selling – Strategic-value customers: best served by means of enterprise selling ©2003 Prentice Hall, Inc. To accompany A Framework for Slide 14 in
Market Targeting Strategies  Evaluating and selecting market segments requires assessing the segment’s overall attractiveness in light of company’s objectives and resources.  Five patterns of target market selection can then be considered. ©2003 Prentice Hall, Inc. To accompany A Framework for Slide 15 in
Market Targeting Strategies Patterns of Target Market Selection  Single-segment  Product concentration specialization  Selective  Market specialization specialization Full market coverage ©2003 Prentice Hall, Inc. To accompany A Framework for Slide 16 in
Market Targeting Strategies  Targeting multiple segments may result in cost economies  Supersegment targeting may be appropriate  Blocked markets often require megamarketing countermeasures  Be aware of ethical concerns ©2003 Prentice Hall, Inc. To accompany A Framework for Slide 17 in

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