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8 Identifying Market Segments and Targets Lec#1

Chapter Questions

What are the different levels of market segmentation? How can a company divide a market into segments? What are the requirements for effective segmentation? How should business markets be segmented? How should a company choose the most attractive target markets?
8-2

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

Introduction

Concept of Mass Marketing Effectively utilized by different companies such as Coca Cola, Ford etc Creates large market potential, low cost. Nowadays customer are more and more changing

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

8-3

What is a Market Segment?

A market segment consists of a group of customers who share a similar set of needs and wants. Cars market Marketers do not create a segment The task is to identify segment and decide which one to target

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

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Steps in Market Segmentation, Targeting, and Positioning

Market Segmentation
1. Identify bases for segmenting the market 2. Develop segment profiles

Market Targeting

3. Develop measure of segment attractiveness 4. Select target segments

Market positioning

CHP: 8&10-5

5. Develop positioning for target segments 6. Develop a marketing mix for each segment

Four levels of Micromarketing

Segments

Niches

Local areas

Individuals

CHP: 8&10-6

Segment Marketing

Targeting a group of customers who share a similar set of needs and wants. - Segment and Sector

CHP: 8&10-7

Basic Market Preference Patterns

CHP: 8&10-8

Niche Marketing

A Niche is a more narrowly defined customer group seeking Distinctive mix of benefits.

Marketers usually identify niches by dividing a segment into subSegments. E.g., Cleveland's Progressive auto insurer
It is assumed that globalization and internet has enhanced the Concepts of Niche Marketing. E.g., stamps.co.uk, etc

CHP: 8&10-9

Local Marketing

Targeting the needs and wants of local customer groups (trading areas, neighborhoods, even individual stores). Also called grassroots marketing Nikes initial success Usually in the form of experiential marketing.

Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall

8-10

Customerization

Combines operationally driven mass customization with customized marketing in a way that empowers consumers to design the product and service offering of their choice.

CHP: 8&10-11

Examples of Market Customization

CHP: 8&10-12