LECTURE-7 Identifying Market Segments and Targets Chapter

LECTURE-7 Identifying Market Segments and Targets

Chapter Questions • What are the different levels of market segmentation? • How can a company divide a market into segments? • How should a company choose the most attractive target markets? • What are the requirements for effective segmentation?

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.

Four levels of Micromarketing • • Segments Marketing Niche Marketing Local areas Marketing Individuals Marketing

What is a Market Segment? A market segment consists of a group of customers who share a similar set of needs and wants.

Flexible Marketing Offerings • Naked solution: Product and service elements that all segment members value. Example: Base model of the vehicle. • Discretionary options: Some segment members value options but not all. Example: Same model with different features.

Preference Segments • Homogeneous preferences exist when consumers want the same things. • Diffused preferences exist when consumers want very different things. • Clustered preferences reveal natural segments from groups with shared preferences.

Niche Marketing A niche is more narrowly defined customer group seeking a distinctive mix of benefits.

Niche Marketing… Revolution pioneered the concept of “plus sized fashion”, and is very proud to be a brand that accepts women as they are. http: //www. revolution. bz/aboutus. php

What is Customerization? Customerization combines operationally driven mass customization with customized marketing in a way that empowers consumers to design the product and service offering of their choice.

Bases For Segmenting Consumer Markets • Geographic Segmentation • Division of the market into different geographical units such as nations, states, regions, countries, cities or neighborhoods etc. • Demographic Segmentation • We divide the market into groups on the basis of variables such as age, family size, family life cycle, gender, income, occupation, religion, race, generation, nationality and social class etc.

Bases For Segmenting Consumer Markets • Psychographic Segmentation • Buyers are divided into different groups on the basis of psychological/personality traits, lifestyle, or values. • Behavioral Segmentation • Marketers divide buyers into groups on the basis of their knowledge of, attitude toward, use of, or response to a product.

Demographic Segmentation • • • Age and Life-Cycle Stage Gender Income Generation Social Class Occupation

Behavioral Segmentation Decision Roles Behavioral Variables • • • Initiator Influencer Decider Buyer User Occasions Benefits User Status Usage Rate Buyer-Readiness Loyalty Status Attitude

The Brand Funnel Illustrates Variations in the Buyer-Readiness Stage • • • Aware Ever tried Recent trial Occasional user Regular user Most often used

Loyalty Status • Hard-core • Consumer who buy only one brand all the time. • Split loyals • Consumers who are loyal to two or three brands. • Shifting loyals • Consumers who shift loyalty from one brand to another. • Switchers • Consumers who show no loyalty to any brand.

Segmenting for Business Markets • Demographic • Industry/Company Size/Location • Operating variable • Technology/User Non User status/Customer capabilities • Purchasing approaches • Purchasing Function Organization/Power Structure/Nature Of Existing relationship/General Purchasing policies/Purchasing Criteria

Segmenting for Business Markets…. . • Situational factors • Urgency/Specific Application/Size or Order • Personal characteristics • Buyer Seller Similarity/Attitude Toward Risk/Loyalty

Steps in Segmentation Process • • Need-based segmentation Segment identification Segment attractiveness Segment profitability Segment positioning Segment acid test Market mix strategy

Effective Segmentation Criteria • • • Measurable Substantial Accessible Differentiable Actionable

Bibliography v Marketing Management – A South Asian Perspective by Philip Kotler, Kevin Lane Keller, Abraham Koshy & Mithileshwar Jha, 13 th Edition, Published by Pearson Education, Inc. v Strategic Marketing Management – Meeting The Global Marketing Challenges by Carol H. Anderson & Julian W. Vincze Published by Houghton Mifflin Company. v Principles of Advertising & IMC by Tom Duncan 2 nd Edition, Published by Mc. Graw-Hill Irwin. v Principles of Marketing by Philip Kotler & Gary Armstrong Thirteenth Edition, Published by Prentice Hall

"Don't be afraid of the space between your dreams and reality. If you can dream it, you can make it so. " Belva Davis The End…