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Gilbert A. Churchill, Jr. J. Paul Peter
Chapter 8Market Segmentation
Marketing
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Basic DefinitionsSlide8-1
Approach
Market
Market
Segmentation
Definition
Target
Market
Individuals or organizations with the desire and
ability to buy goods and services
The particular market segment that the organization
selects to serve.
The process of dividing a market into groups of
potential buyers who have similar needs andwants, value perceptions, or purchasing behavior
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Approaches to Serving MarketsTable8.1
Slide8-2
Approach
Mass Marketing A single marketing mix forthe entire market
SegmentMarketing
Description Examples
IndividualMarketing
Phone service, WEB pages
Niche Marketing
A single marketing mix for
one segment of the market
Women's Workout World (exercise
facilities for women); American
Association for Retired Persons
(lobbying and membership servicesfor people over 50)
McDonalds (Happy Meals for
young children, Big Macs for
Teens, Arch Deluxe for adults);
Toshiba copiers (several sizes and
features to meet different levels of
business needs)
Personalized amenities for repeat
guests at Ritz-Carlton hotels;
management consulting services
tailored to an organizations needs
A marketing mix
customized for an
individual or organization
Differentiated Marketing
Separate marketing mixes
for two or more segmentsof the market
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Market Segmentationused to develop a competitive advantage
Market Potential - the totalpurchases that buyers in asegment will likely make during aspecified period of time, given aspecified level of marketing activity
Measurability - be ableto measure its size andcharacteristics
Responsiveness -respond differently to
some aspect of the 4Pthan other se ments
Accessibility - be ableto reach members of targetsegment with customized
marketing mixes
Criteria forSuccessful
MarketSegmentation
Slide8-3
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P & G Segmentation - Detergent Market53% market share of the $3.2 billion market
TIDE - Tidesin, dirt out
CHEER - all
temperature -Cheer
BOLD- cleans,soften,and
controls static
GAIN -freshens like
sunshine
ERA - built-in stain
remover
DASH -attack
tough dirt
OXYDOL -makes clothes
bright
SOLO - liquiddetergent with
fabric softener
DREFT - a
clean you cantrust
IVORY SNOW -mild, gentle soapfor baby clothes
ARIEL - toughcleaner
Slide8-4
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Mass/Undifferentiated MarketingSlide8-5
Price
PromotionPlacement
Product
The Market
Everyone
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Niche MarketingSlide8-6
Price
PromotionPlacement
Product
The Market
MarketSegment
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Differentiated MarketingSlide8-7
Price
PromotionPlacement
Product
The Market
Market
Segment
MarketSegment
Price
PromotionPlacement
Product
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Individual MarketingSlide8-8
Price
PromotionPlacement
Product
The Market
CustomerPrice
PromotionPlacement
Product
Price
PromotionPlacement
Product
Price
Promotion
Placement
Product
Customer
Customer
Customer
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Some Bases for SegmentingConsumer Markets
Slide8-9
Demographic
Segmentation
Geographic
PsychologicalBenefit
Behavior SouthwestAirlines
Frito-Lay
SnacksColgate
Toothpaste
CampbellSoup
LevisDockers
Table8.2
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VALS2 Lifestyle Categories -Consumer Markets
Slide8-10
Figure8.2
Resources
Abundant
Self-OrientationPrincipalOriented
StatusOriented
ActionOriented
Minimal
Fulfilleds Achievers Experiencers
Believers Strivers Makers
Strugglers
Actualizers
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Some Bases for SegmentingOrganizational Markets
Slide8-11
Segmentation
Geographic
CustomerType
OrganizationalBuyer
BehaviorFlowers IndustriesBaked Goods
IntelComputer Chips
Apple ComputerNewton PocketComputer
Table8.3
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The Process of Market Segmentation
Slide8-12
Figure8.5
Analyze Customer
Product Relationship
Investigate
Segmentation Bases
Develop Product
Positioning
Select Segmentation
Strategy
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Product Position
Positioning Bases
AttributeBMW - performance
Price and QualityDillards VS KMart
Use or ApplicationGatorate
Product UserJ&J Baby Shampoo
Product ClassParkay, Caress
Competitor
VISA VS AMEX
The perception of the product
relative to competing
products in the minds of
potential buyers.
Slide8-13
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Sample Positioning Map: AutomobilesSlide8-14
Figure8.6
Traditional Sporty
Functional
Luxurious
Lexus
BMW
Pontiac
Mercedes
Cadillac
Lincoln
ChryslerBuickOldsmobile
Porsche
Chevrolet
Nissan
Toyota
SaturnVW
Ford
Dodge
Plymouth
Mercury