Market Segmentation and Strategic Targeting

1
 Previous Topic’s Review

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 Today’s Learning Objectives
To Understand:
1 Why Market Segmentation Is Essential

2 The Criteria for Targeting Selected Segments

Effectively

3 Bases for Segmenting Consumers

How Segmentation and Strategic Targeting Are

4
Carried Out

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 A Model of Consumer Decision Making

Firm’s Marketing Efforts Social Environment

INPUT
4P Family, Group,
Culture, Social Class

PROCESS Motivation, Perception, Learning, Personality, Attitudes

OUTPUT Purchase and Post-Purchase Evaluation

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 Why Segmentation is Necessary
Consumer
Segmenting Targeting Positioning
Research

• Consumer needs differs

• Differentiation helps
products compete
• Segmentation helps identify
media

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 Why Segmentation is Necessary cont’d

Consumer
Segmenting Targeting Positioning
Research

Criteria for Effective Targeting: Positioning:

Identifiable Sizeable The value proposition,
expressed through
promotion, stating the
product’s or service’s
capacity to deliver specific
benefits.
Stable Accessible

Congruent with
the company’s
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 What Kind of
Consumer Does This Ad Target?

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 Bases for Segmentation

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 Class Discussion

• Considering GP:
– How might consumers’ needs differ?
– What types of products might meet their needs?
– What advertising media makes sense for the
different segments of consumers?

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 Consumer-Rooted Segmentation Bases

• Age
Demogr •
•
Gender
Marital Status

aphics •
•
Family Life-cycle
Income, Education, and Occupation

Geodem • Based on geography and

demographics

ographic
• People who live close to one
another are similar

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 Consumer-Rooted Segmentation Bases
cont’d

• People often do not identify these traits

Personality Traits because they are guarded or not
consciously recognized

• Psychographics
• Includes activities, interests, and opinions
Lifestyles • They explain buyer’s purchase decisions
and choices
• Sociological = group, Anthropological = cultural
• Include segments based on
Sociocultural – Cultural values
– Sub-cultural membership
– Cross-cultural affiliations

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Class Discussion/sample questions

• According to the article:

– Based on demographic/ geodemographic
segmentation, how many segments are there in the
market?
– What are the characteristics and lifestyle traits of each
segment?

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 Consumption-Specific Segmentation Bases

• Awareness status
Usage rate • Level of involvement

• Segmenting on the basis of special

Usage occasions or situations
situation • Example : When I’m away on business, I try
to stay at a suites hotel.

Benefit • Benefits sought represent consumer needs

• Important for positioning
segmentation • Benefits of media

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Consumption-Specific Segmentation Bases cont’d

• Brand loyalty includes:

Perceived – Behavior
brand – Attitude
loyalty • Frequency award programs are popular
• Customer relationships can be active or passive
• Retail customers seek:
– Personal connections vs. functional features
Brand • Banking customers seek:
relationshi – Special treatment
p – Confidence benefits
– Social benefits

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 Class Discussion

• Which Consumption-Related Segmentation Is

Featured in This Ad?

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 Class Discussion cont’d

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 Implementing Segmentation Strategies

• Concentrated Marketing
– One segment
• Differentiated
– Several segments with individual marketing mixes
• Counter segmentation
• Micro-targeted

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 Summary

Consumer-rooted Consumption-specific

Concentrated
Marketing

Counter
Differentiation
Segmentation

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