marketing management 13 th edition 8 identifying market segments and targets kotlerkeller
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MARKETING MANAGEMENT13th edition
8 Identifying Market
Segments and Targets
Kotler Keller
CHP: 8&10-2
Effective Targeting Requires…
• Identify and profile distinct groups of buyers who differ in their needs and preferences.
• Select one or more market segments to enter.
• Establish and communicate the distinctive benefits of the market offering.
CHP: 8&10-4
Steps in Market Segmentation, Targeting, and Positioning
Market Segmentation
1. Identify bases for segmenting the market2. Develop segment profiles
Market Segmentation
1. Identify bases for segmenting the market2. Develop segment profiles
Market Targeting3. Develop measure of segment attractiveness4. Select target segments
Market Targeting3. Develop measure of segment attractiveness4. Select target segments
Market positioning5. Develop positioning for target segments6. Develop a marketing mix for each segment
Market positioning5. Develop positioning for target segments6. Develop a marketing mix for each segment
CHP: 8&10-5
Four levels of Micromarketing
Segments
Local areas Individuals
Niches
CHP: 8&10-6
Segment Marketing
Targeting a group of customerswho share a similar set of
needs and wants.
CHP: 8&10-7
Basic Market Preference Patterns
CHP: 8&10-8
Customerization
Combines operationally drivenmass customization with customizedmarketing in a way that empowers
consumers to design theproduct and service offering
of their choice.
CHP: 8&10-9
Examples of Market Customization
CHP: 8&10-10
Segmenting Consumer Markets
GeographicGeographic
DemographicDemographic
PsychographicPsychographic
BehavioralBehavioral
CHP: 8&10-11
Demographic Segmentation
Age and Life CycleAge and Life Cycle
Life StageLife Stage
GenderGender
IncomeIncome
GenerationGeneration
Social ClassSocial Class
CHP: 8&10-13
Behavioral Segmentation
Decision Roles
• Initiator
• Influencer
• Decider
• Buyer
• User
Behavioral Variables
• Occasions
• Benefits
• User Status
• Usage Rate
• Buyer-Readiness
• Loyalty Status
• Attitude
CHP: 8&10-14
Behavioral Segmentation Breakdown
CHP: 8&10-15
Segmenting for Business Markets
DemographicDemographic
Operating VariableOperating Variable
Purchasing ApproachesPurchasing Approaches
Situational FactorsSituational Factors
PersonalCharacteristics
PersonalCharacteristics
CHP: 8&10-16
Segmenting for Business Markets
• Demographic segmentation– Industry, company size, location
• Operating variables– Technology, usage status,
customer capabilities• Purchasing approaches• Situational factors
– Urgency, specific application, size of order
• Personal characteristics– Buyer-seller similarity, attitudes
toward risk, loyalty
CHP: 8&10-17
• Size, purchasing power, profiles of segments can be measured.
• Segments can be effectively reached and served.
• Segments are large or profitable enough to serve.
Measurable Measurable
AccessibleAccessible
SubstantialSubstantial
DifferentialDifferential
ActionableActionable
• Segments must respond differently to different marketing mix elements & programs.• Effective programs can be designed to attract and serve the segments.
Effective Segmentation Criteria
CHP: 8&10-18
Market TargetingEvaluating Market Segments
• Segment Size and Growth– Analyze current sales, growth rates and expected
profitability for various segments.• Segment Structural Attractiveness
– Consider effects of: competitors, availability of substitute products and, the power of buyers & suppliers.
• Company Objectives and Resources– Company skills & resources needed to succeed in
that segment(s).– Look for Competitive Advantages.
CHP: 8&10-19
Segment 1Segment 1
Segment 2Segment 2
Segment 3Segment 3
Segment 1Segment 1
Segment 2Segment 2
Segment 3Segment 3
CompanyMarketing
Mix
CompanyMarketing
Mix
CompanyMarketing
Mix
CompanyMarketing
Mix
CompanyMarketing Mix 1
CompanyMarketing Mix 1
CompanyMarketing Mix 2
CompanyMarketing Mix 2
CompanyMarketing Mix 3
CompanyMarketing Mix 3
MarketMarket
A. Undifferentiated Marketing
B. Differentiated Marketing
C. Concentrated Marketing
Market TargetingMarket Coverage Strategies
CHP: 8&10-20
Patterns of Target Market Selection
CHP: 8&10-21
Patterns of Target Market Selection
CHP: 8&10-22
Patterns of Target Market Selection
MARKETING MANAGEMENT13th edition
10 Crafting the Brand
Positioning
Kotler Keller
CHP: 8&10-24
Marketing Strategy
SegmentationSegmentation
TargetingTargeting
PositioningPositioning
CHP: 8&10-25
Positioning
Act of designing the company’soffering and image to occupy
a distinctive place in the mind ofthe target market.
CHP: 8&10-26
Choosing a Positioning Strategy
Step 1. Identifying Possible
Competitive Advantages
Step 2. Selecting the Right
Competitive Advantage
Step 3. Communicating and
Delivering the Chosen Position
CHP: 8&10-27
Defining Associations
Points-of-difference (PODs)
• Attributes or benefits consumers strongly associate with a brand, positively evaluate, and believe they could not find to the same extent with a competitive brand
Points-of-parity
(POPs)• Associations that are
not necessarily unique to the brand but may be shared with other brands
CHP: 8&10-28
Consumer Desirability Criteria for PODs
RelevanceRelevance
DistinctivenessDistinctiveness
BelievabilityBelievability
CHP: 8&10-29
Deliverability Criteria for PODs
FeasibilityFeasibility
CommunicabilityCommunicability
SustainabilitySustainability
CHP: 8&10-30
Examples of Negatively Correlated Attributes and Benefits
• Low-price vs. High quality
• Taste vs. Low calories
• Nutritious vs. Good tasting
• Efficacious vs. Mild
• Powerful vs. Safe
• Strong vs. Refined
• Ubiquitous vs. Exclusive
• Varied vs. Simple
CHP: 8&10-31
• Positioning: How many ideas to promote?
• Unique selling proposition
– Four major positioning errors1. Underpositioning
2. Overpositioning
3. Confused positioning
4. Doubtful positioning
Developing and Communicating a Positioning Strategy
CHP: 8&10-32
Differentiation Strategies
Product
Channel Image
Personnel
CHP: 8&10-33
Product Differentiation
• Product form• Features• Performance• Conformance• Durability• Reliability• Reparability
• Style• Design• Ordering ease• Delivery• Installation• Customer training• Customer consulting• Maintenance
CHP: 8&10-34
Identity and Image
Identity:
The way a
company aims to
identify or
position itself
Image:
The way the
public perceives
the company or its
products