Chapter 8Chapter 8Identifying Market Segments & Identifying Market Segments & TargetsTargets

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Identifying Market Segments

The Company can not relate to all of its customers in a large market, a broad and diverse

Companies can divide the market into consumer groups (segments) with different needs and desires

Companies must identify which segments can be served effectively and profitably

Mass Marketing Mass marketing: one product for all buyers mass marketing company doing the

production, distribution, mass promotion all consumers.

Mass marketing is popular because: a large potential market, low production costs, the price to consumers cheap / affordable

Market Segments• Market segments : a group of customers who have a similar

set of needs and wants• Task marketers: not invent, but to identify and decide which

segments are targeted• Advantages :

1.Designing, pricing, release and deliver products / services to better2.Customize programs and marketing activities to beat competitorsMarketing flexible market : 1.Naked solution: contains the products / services that are

appreciated all member segments2.Options Open: Appreciated several segments membersThe determination of the character of market segments :1.Preferences homogeneous: When all consumers have the same

preferences 2.Preferences diffused: Consumers have varying preferences 3.Preferences group: resulting from market segments of consumer

groups with similar preferences

Niche Marketing A niche is a more narrowly

customers who are looking for a mix of different benefits

A niche is subsegment Interesting niche:

1.Customers are willing to pay more

2.Size, earnings and growth potential

3.Not pull the other competitors

4.Certain economy through specialization

Local Marketing

Local marketing: marketing objectives that are tailored specifically to the needs and wishes of local customers

Grass roots marketing: marketing activities to as close as possible and relevant as possible with individual customers

Individual Marketing• Now customers began to take a

more individual initiative in determining what to buy and how. They went into the Internet, searching for information and evaluation of product or service, engage in dialogue with suppliers, users, and critics of the product, and in many cases, designing a product they want

Basic Consumer Market Segmentation

1. Geographical segmentation2. Demographic segmentation (age

and stage of life cycle, life stage, gender, income, generation, social class)

3. Psychographic segmentation (combined Psychological & Demography)

4. Behavioral segmentation (based on consumer behavior)

Geographical Segmentation

Geographical segmentation requires the division of the market into various geographic units such as the State, state, region, district, city, or neighborhood.

Demographic segmentation

In demographic segmentation, it divide the market into groups based on variables such as age, life stage, gender, income, etc.

Psychographic segmentation

Psychographic is the science of using psychology and demographics in order to better understand the consumer. In psychographic segmentation, buyers are divided into various groups based on the nature of psychological / personality, lifestyle, or value

Segmentation system VALS (Psychographic)

Behavourial Segmentation In behavioral

segmentation, marketers divide into several groups based on knowledge, attitude, use of, or response to a product.

Behavourial Segmentation Many marketers believe

that behavioral variables:

1. The occurrence: can be defined based on the time of day, month and year.

. The benefits: not everyone who buys a product wants the same benefits of the product.

3. User Status: all products have non-users, ex-users, potential users, users first, and regular users.

4. The level of use: the market can be segmented into user-class products light, medium, and heavy.

5. Loyalty Status

a. loyalist weight: consumers who only buy one brand over time.

b. loyalists were divided: consumers loyal to two or three brands

c. loyalists shifting: the loyalty of consumers who switch from one brand to another brand.

d. The people who like to move: consumers who do not show loyalty to any brand.

6. Attitudes

There are five attitudes in the product are: Enthusiastic, positive, apathetic, negative and aggressive.

Model Conversion: measure the strength of consumer psychological commitment to the brand and their openness to change.

Basic Market Segmentation Business We can segment the business market with some of

the same variables that we use in the consumer market, such as geography, benefits sought, and the level of use, but business marketers are also using other variables.

Basic Market Segmentation Business

Determination of the target market

After the company identifies opportunities its market segment, the company must decide how many and which segments should be targeted.

There are two additional considerations in evaluating and selecting segments, namely:

  1. The invasion plan segment-by-segment.  2. The ethical choice target market

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