Objectives

Identifying Market Segments Choosing Target Markets

Steps in Market Segmentation, Targeting,and Positioning

Market Segmentation
1. Identify segmentation variables and segment the market
2. Develop profiles of resulting segments

Market Targeting
3. Evaluate attractiveness of each segment 4. Select the target segment(s)

Market Positioning
5. Identify possible positioning concepts for each target segment
6. Select, develop, and communicate the chosen positioning concept

Basic Market-Preference Patterns

(a) Homogeneous preferences (b) Diffused preferences (c) Clustered preferences

Creaminess

Creaminess

Sweetness

Sweetness

Creaminess Sweetness

Market-Segmentation Procedure
Survey

Motivations Attitudes Behavior Factors Clusters

Analysis Profiling

Bases for Segmenting Consumer Markets

Geographic
Region, City or Metro Size, Density, Climate

Demographic
Age, Gender, Family size and Fife cycle, Race, Occupation, or Income ...

Psychographic
Lifestyle or Personality

Behavioral
Occasions, Benefits, Uses, or Attitudes

Bases for Segmenting Business Markets

Demographic Operating Variables Purchasing Approaches Situational Factors Personal Characteristics

Effective Segmentation
Measurable Substantial Accessible Differential Actionable
Size, purchasing power, profiles of segments can be measured. Segments must be large or profitable enough to serve. Segments can be effectively reached and served. Segments must respond differently to different marketing mix elements & actions. Must be able to attract and serve the segments.

Heavy and Light Users of Common Consumer Products

PRODUCT (% USERS)
Soups and detergents (94%) Toilet tissue (95%) Shampoo (94%) Paper towels (90%) Cake mix (74%) Cola (67%) Beer (41%) Dog food (30%) Bourbon (20%)

HEAVY HALF

LIGHT HALF

75% 71% 79% 75% 83%

25% 29% 21% 25% 17%

83%
87% 81% 95%

17%
13% 19% 5%

Additional Segmentation Criteria

Ethical Choice of Market Targets Segment Interrelationships & Supersegments Segment-by-Segment Invasion Plans Intersegment Cooperation

Five Patterns of Target Market Selection

Single-segment concentration

M1 M2 M3 P1 P2 P1 P2

M1 M2 M3
P1 P2

Selective specialization

Product specialization

M1 M2 M3

P3

P3
Market specialization

P3
Full market coverage

M1 M2 M3 P = Product M = Market P1 P1

M1 M2 M3

P2
P3

P2
P3

Segment-by-Segment Invasion Plan

Customer Groups
Airlines Railroads Truckers

Product Varieties

Large computers Mid-size computers Personal computers

Company A

Company B

Company C

Review
Identifying Market Segments Choosing Target Markets