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Target Market A specific group of customers on whom an organization focuses its marketing efforts
Large or small customer groups Single or multiple product markets Local to global markets
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FIGURE 1.1
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The Marketing Mix Four marketing activitiesproduct, distribution, promotion, and pricingthat a firm can control to meet the needs of customers within its target market
Product
Distribution
Promotion Pricing
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Target Market
Distribution
Promotion
Activities that inform customers about the organization and its products
Decisions and actions that establish pricing objectives and policies and set product prices
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Pricing
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Some Definitions
Market Segmentation is the process of dividing a total market into groups, or segments, consisting of people or organizations with relatively similar product needs. The purpose is to enable a marketer to design a marketing mix (mm) that more precisely matches the needs of customers in the selected market segments.
A Market Segment - consists of individuals, groups, or organizations with one or more similar characteristics that cause them to have relatively similar product needs.
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Mass Marketing
One mm for all
Segment Marketing
One or more mm targeted to one or more segments
Niche Marketing
One or more mm targeted to one or more sub-segments
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11 FIGURE 7.3
Psychographic Segmentation
Lifestyle culture oriented sports oriented outdoor oriented
Personality compulsive , gregarious authoritarian , ambitious
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Behavioral Segmentation
Occasions Benefits User Status Regular Quality Non User Special Service Ex- User Economy Potential user Speed First time user Regula r user
Usage Rate
Loyalty Status Attitude towards product Readiness stage
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Light
None
Medium
Medium
Heavy
Strong Indifferent Absolute Negative Hostile
Informed
Interested
Desiro us
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Demographic Variables
Perhaps the most widely used and most widely available Objective Often a proxy for harder to obtain Psychographics
College student and interest in education 50 year old and interest in retirement funds
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Psychographics Variables
Personality characteristics
Marketers appeal to positive/favorable personal characteristics to influence the purchase decision.
Motives
Marketers use individuals differing purchase motives to segment a product market.
Lifestyles
Marketers segment markets according to how individuals choose to spend their time in various activities, their income, their interest and opinions, and their education.
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Behaviorist
Behaviorist often called usage Very straightforward - target your users May be hard to get (surprisingly) 80/20 rule (80% sales are to 20% of your customers Ethical?
Vodka targeting alcoholics?
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Geographic
If you are a regional firm then Geo targeting is also self evident Some firms have regional product mix (grocery stores and ethnic foods. Even national firms may target regionally.
Product may mean different things in different parts of the country
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Technology
Similar values
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Geodemographic Segmentation
Marketing segmentation that clusters people in pin code areas and smaller neighborhood units based on lifestyle (psychographic) and demographic information
(Combines Geographic and Demographic info)
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VALS
Percentage of Adults, Classified by VALS Type, Who Participated in Selected Sports in 1996
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23 FIGURE 7.6
Once We Have Our Segments We Need to Target Them With a Marketing Mix
Three options:
Undifferentiated Differentiated Concentrated
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Targeting Strategies
The classic mass marketing, all things to all people approach Ignore segments One mm Rarely used today Name an undifferentiated product?
4/10/2012 25 FIGURE 7.2
FIGURE 7.2
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The firm decides to target several separate segments and designs separate marketing strategies for each GMs a car for every purpose, purse, and personality vs. Fords one car for every purpose for every purse for every personality Typically, for most firms, this means you go for a small share of the larger, total aggregate market (one or two mm for one or two 4/10/2012 27 segments (out of maybe six or seven)
Concentrated Marketing
The firm goes for a large share of a single (or very few) segments.
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28 FIGURE 7.2
FIGURE 7.1
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Finally We Position
Market Segmentation (ID) 2. Determine which segmentation variables to use 3. Develop market segment profiles Market Targeting (Evaluate) 4. Evaluate relevant market segments 5. Select target markets Market Positioning (Enter) Develop positioning for target segments Develop a marketing mix for each segment
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Positioning
The Place a product occupies in consumers mind relative to competing products
Volvo positions on safety BMW on driving pleasure Dell on superior direct channels Mc Donald on service quality and price Tata on durability reliability quality
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Benefits
Yes No No
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Perceptual Maps
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Thank you
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