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Identifying MarketSegments and Targets

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Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall 8-2

Chapter Questions

What are the different levels of marketsegmentation?

How can a company divide a market into

segments? What are the requirements for effective

segmentation?

How should business markets be segmented? How should a company choose the most

attractive target markets?

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Introduction

Concept of Mass Marketing

Effectively utilized by different companiessuch as Coca Cola, Ford etc

Creates large market potential, low cost.

Nowadays customer are more and more

changing

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall 8-3

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Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall 8-4

What is a Market Segment?

A market segment consists of a groupof customers who share a similar set of

needs and wants.

Cars market

Marketers do not create a segment

The task is to identify segment and

decide which one to target

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CHP: 8&10-5

Steps in Market Segmentation,Targeting, and Positioning

Market Segmentation1. Identify bases for

segmenting the market

2. Develop segment profiles

Market Targeting3. Develop measure of

segment attractiveness4. Select target segments

Market positioning5. Develop positioning for

target segments6. Develop a marketing

mix for each segment

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CHP: 8&10-6

Four levels of Micromarketing

Segments

Local areas Individuals

Niches

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CHP: 8&10-7

Segment Marketing

Targeting a group of customerswho share a similar set ofneeds and wants.

- Segment and Sector

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CHP: 8&10-8

Basic Market Preference Patterns

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CHP: 8&10-9

Niche Marketing

A Niche is a more narrowly defined customer group seeking

Distinctive mix of benefits.

Marketers usually identify niches by dividing a segment into sub-Segments. E.g., Cleveland's Progressive auto insurer

It is assumed that globalization and internet has enhanced the

Concepts of Niche Marketing. E.g., stamps.co.uk, etc

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Local Marketing

Targeting the needs and wants of localcustomer groups (trading areas,neighborhoods, even individual stores).

Also called grassroots marketing Nikes initial success

Usually in the form of experiential marketing.

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall 8-10

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CHP: 8&10-11

Customerization

Combines operationally drivenmass customization with customizedmarketing in a way that empowersconsumers to design theproduct and service offeringof their choice.

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CHP: 8&10-12

Examples of MarketCustomization