Identifying Market Segments and Targets
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1 Chapter 7 Identifying Segments and Targets 7-1 ing Management Process 1. Situation Analysis Customer Analysis Competitor Analysis Company Analysis 2. Establish Strategic Direction Segmentation and Targeting Positioning Differentiation 3. Formulate ing Strategy (The ing Mix) Product Price Place (Distribution) Promotion (Communication) 4. Implementation and Review Operational Objectives Benchmarks Performance Monitoring and Evaluation ing Management Process 1. Situation Analysis Customer Analysis Competitor Analysis Company Analysis 2. Establish Strategic Direction Segmentation and Targeting Positioning Differentiation 3. Formulate ing Strategy (The ing Mix) Product Price Place (Distribution) Promotion (Communication) 4. Implementation and Review Operational Objectives Benchmarks Performance Monitoring and Evaluation 1
2 Chapter Questions Why segmentation? Preference Patterns Steps in segmentation process Criteria of effective segmentation Bases of Consumer Segments: Bases of Business Segments: Patterns of Target Selection Targeting multiple segments Target ing Requires That ers Identify and profile distinct groups of buyers who differ in their needs and preferences (market segmentation). Select one or more segments to enter (market targeting). Establish and communicate the offering s distinctive benefit(s) to each target segment (marketing positioning). 7-5 Levels of Segmentation Segment marketing: Niche marketing: 1Up.com Local marketing: banks do it Individual marketing 7-6 2
3 Effective Segmentation Criteria Measurable Substantial Accessible Differentiable Actionable 7-7 Steps in Segmentation, Targeting,and Positioning Segmentation Targeting Positioning 1. Identify segmentation variables and segment the market 2. Develop profiles of resulting segments 3. Evaluate attractiveness of each segment 4. Select the target segment(s) 5. Identify possible positioning concepts for each target segment 6. Select, develop, and communicate the chosen positioning concept Bases for Segmenting Consumer s Geographic Region, City or Metro Size, Density, Climate Demographic Age, Gender, Family size and Life cycle, Race, Occupation, or Income... Psychographic Lifestyle or Personality Behavioral Occasions, Benefits, Uses, or Attitudes 3
4 VALS2 TM classifies U.S. adults into eight psychographic groups Primary Motivation Fullfilleds (Thinkers) Actualizers (Innovators) Principle oriented Status oriented Action oriented (Ideals) (Achievement) (Self-Expression) Achievers Abundant resources Experiencers Believers Strivers Makers Strugglers (Survivors) Minimal resources Quality/values Brand Names Outdoor Segmenting Business s: Bases for Segmentation Operating variables: technology, user or non user status, customer capabilities Purchasing approaches: centralized/decentralized, power structure (eng/fin dominated?), nature of relationship, purchase policies, purchasing criteria Situational factors: Urgency, specific application, size of order Personal characteristics: buyerseller similarity, risk attitude, loyalty Demographic variables: Industry, company size, location Evaluating and Selecting Segments Must look at two factors: Segment s overall attractiveness Company s objectives and resources
5 Targeting Strategies: Patterns of Target Selection Porsche Crest Whitesrips microscope Office Depot Coke, GM Sporty newly engaged women universities brides-to-be government gay males laboratories Why multiple segments? Full Coverage Undifferentiated marketing firm goes after the whole market with one market offering. Differentiated marketing operate in several market segments and design different programs for each segment
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