Marketing Chapter 8 Market Segmentation Gilbert A. Churchill, Jr. J. Paul Peter
Slide 8 -1 Basic Definitions Approach Market Segmentation Target Market Definition Individuals or organizations with the desire and ability to buy goods and services The process of dividing a market into groups of potential buyers who have similar needs and wants, value perceptions, or purchasing behavior The particular market segment that the organization selects to serve.
Slide 8 -2 Table 8. 1 Approaches to Serving Markets Approach Mass Marketing Description A single marketing mix for the entire market Niche Marketing A single marketing mix for one segment of the market Segment Marketing Differentiated Marketing Separate marketing mixes for two or more segments of the market Individual Marketing A marketing mix customized for an individual or organization Examples Phone service, WEB pages Women's Workout World (exercise facilities for women); American Association for Retired Persons (lobbying and membership services for people over 50) Mc. Donald’s (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 organization’s needs
Market Segmentation Slide 8 -3 used to develop a competitive advantage Market Potential - the total purchases that buyers in a segment will likely make during a specified period of time, given a specified level of marketing activity Criteria for Successful Market Segmentation Measurability - be able to measure its size and characteristics Accessibility - be able to reach members of target segment with customized marketing mixes Responsiveness respond differently to some aspect of the 4 P than other segments
Slide 8 -4 P & G Segmentation - Detergent Market 53% market share of the $3. 2 billion market TIDE - “Tide’s in, dirt out” ARIEL - “tough cleaner” CHEER - “all temperature Cheer” DREFT - “a clean you can trust” BOLD - “cleans, soften, and controls static” GAIN “freshens like sunshine” IVORY SNOW “mild, gentle soap for baby clothes SOLO - “liquid detergent with fabric softener ERA - “builtin stain remover” DASH “attack tough dirt” OXYDOL “makes clothes bright”
Slide 8 -5 Mass/Undifferentiated Marketing The Market Product Price Everyone Placement Promotion
Slide 8 -6 Niche Marketing The Market Product Price Placement Promotion Market Segment
Slide 8 -7 Differentiated Marketing The Market Product Price Placement Promotion Market Segment
Slide 8 -8 Individual Marketing The Market Product Price Placement Promotion Customer
Slide 8 -9 Table 8. 2 Some Bases for Segmenting Consumer Markets Levis Dockers Demographic Campbell Soup Geographic Behavior Segmentation Benefit Colgate Toothpaste Southwest Airlines Psychological Frito-Lay Snacks
Slide 8 -10 Figure 8. 2 VALS 2 Lifestyle Categories Consumer Markets Resources Abundant Actualizers Fulfilleds Achievers Experiencers Believers Strivers Makers Strugglers Minimal Principal Oriented Status Oriented Action Oriented Self-Orientation
Slide 8 -11 Table 8. 3 Some Bases for Segmenting Organizational Markets Intel Computer Chips Geographic Segmentation Apple Computer Newton Pocket Computer Organizational Buyer Behavior Customer Type Flowers Industries Baked Goods
Slide 8 -12 Figure 8. 5 The Process of Market Segmentation Analyze Customer Product Relationship Investigate Segmentation Bases Develop Product Positioning Select Segmentation Strategy
Slide 8 -13 Product Position Attribute BMW - performance The perception of the product relative to competing products in the minds of potential buyers. Price and Quality Dillards VS KMart Use or Application Gatorate Positioning Bases Product User J&J Baby Shampoo Product Class Parkay, Caress Competitor VISA VS AMEX
Slide 8 -14 Figure 8. 6 Sample Positioning Map: Automobiles Luxurious • Lexus • Mercedes Cadillac • • BMW Lincoln • Traditional • Chrysler Oldsmobile • • Buick Mercury • Ford • • Porsche • Pontiac Sporty • Chevrolet • Nissan Dodge • Plymouth • • Toyota • VW Functional • Saturn
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