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Segment
Segment
MARKET SEGMENTATION STRATEGY It begins not with identifying product possibilities but with determining customer groups & their needs. A co. can target particular groups rather than blanket the entire market, & it can achieve a higher rate of return. Identifying & categorizing the Market a) Identify & categorize actual or potential customers in to relatively homogeneous segments according to their responses to mktg. mix variables. b) Identify characteristics of these segments or groups. Ask the Following Questions Who? are the members of this segments that have been identified? can buys our product or service? can buys our competitors products or services?
What benefits customers seek? factors influence the demand? function does the product perform for the customer? are important buying criteria? is the basis of comparison with other products? risks does the customer perceive? How do customers buy? long does the buying process last? do customers use this product? does the product fit in to their life style/ operation? much are they willing to spend? much do they buy? Where is the decision made to buy? do the customers seek information about products? do the customers buy the product?
When is the first decision to buy made? is the product repurchased? Segmenting Markets Five Variables Behavioristic segmentation focuses on customer behavior. purchase occasion. Benefits sought. Use status. Usage rate. Loyalty status.
Geographic segmentation Demographic segmentation Psychographic segmentation Benefit segmentation
This Ad Targets Runners Who Are Physically Active People and Also Relish the Outdoors.
Consumer needs differs Differentiation helps products compete Segmentation helps identify media
Discussion Questions
Considering the largest bank in your colleges city or town:
How might consumers needs differ? What types of products might meet their needs? What advertising media makes sense for the different segments of consumers?
Identifiable
Sizeable
Stable
Accessible
Positioning
The value proposition, expressed through promotion, stating the products or services capacity to deliver specific benefits.
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 12 Chapter Three Slide
Which Distinct Benefit Does Each of the Two Brands Shown in This Figure Deliver?
The Dentyne Ads Benefit is Fresh Breath and the Nicorette Ad is Whitening and Smoking Cessation
Geodemographic Segmentation
Based on geography and demographics People who live close to one another are similar Birds of a feather flock together
Personality Traits
People often do not identify these traits because they are guarded or not consciously recognized Consumer innovators
Open minded Perceive less risk in trying new things
Lifestyles
Psychographics Includes activities, interests, and opinions They explain buyers purchase decisions and choices
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 17 Chapter Three Slide
Frequency award programs are popular Customer relationships can be active or passive Retail customers seek:
Personal connections vs. functional features
Benefits of Segmentation
Co is in a better position to spot & compare mkt. opportunities. It can develop mktg. programs based on a clearer idea of how customers in specific segments will respond. It can tailor offerings & programs to the needs of each segment.
Symptoms
Causes
No
Market Present
New