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©2000 Prentice Hall
ObjectivesObjectives
Identifying Market SegmentsIdentifying Market Segments Choosing Target MarketsChoosing Target Markets
©2000 Prentice Hall
Steps in Market Segmentation, Steps in Market Segmentation, Targeting,and PositioningTargeting,and Positioning
1. Identifysegmentationvariables andsegment themarket
2. Develop profiles ofresultingsegments
MarketMarketSegmentationSegmentation
3. Evaluateattractivenessof eachsegment
4. Select thetargetsegment(s)
MarketMarketTargetingTargeting
5. Identifypossible
positioningconcepts foreach target
segment
6. Select,develop, andcommunicate
the chosenpositioning
concept
MarketMarketPositioningPositioning
©2000 Prentice Hall
Basic Market-Preference Basic Market-Preference PatternsPatterns
(a) Homogeneous(a) Homogeneouspreferencespreferences
SweetnessSweetness
Cre
amin
ess
Cre
amin
ess
(c) Clustered(c) Clusteredpreferencespreferences
Cre
amin
ess
Cre
amin
ess
SweetnessSweetness
(b) Diffused(b) Diffusedpreferencespreferences
Cre
amin
ess
Cre
amin
ess
SweetnessSweetness
©2000 Prentice Hall
Market-Segmentation Market-Segmentation ProcedureProcedure
SurveySurveyMotivationsMotivationsAttitudesAttitudesBehaviorBehavior
AnalysisAnalysisFactorsFactorsClustersClusters
ProfilingProfiling
©2000 Prentice Hall
Bases for Segmenting Bases for Segmenting Consumer MarketsConsumer Markets
Occasions, Benefits, Uses, or Attitudes
Behavioral
GeographicRegion, City or MetroSize, Density, Climate Demographic
Age, Gender, Family size and Fife cycle, Race, Occupation, or Income ...
Lifestyle or PersonalityPsychographic
©2000 Prentice Hall
Bases for Segmenting Bases for Segmenting Business MarketsBusiness Markets
DemographicDemographic Operating VariablesOperating Variables Purchasing ApproachesPurchasing Approaches Situational FactorsSituational Factors Personal CharacteristicsPersonal Characteristics
©2000 Prentice Hall
Measurable
Accessible
Substantial
Differential
• Segments must be large or profitable enough to serve.
• Segments can be effectively reached and served.
Actionable
• Size, purchasing power, profiles of segments can be measured.
• Segments must respond differently to
different marketing mix elements & actions.
• Must be able to attract and serve
the segments.
Effective SegmentationEffective Segmentation
©2000 Prentice Hall
Heavy and Light Users of Heavy and Light Users of Common Consumer ProductsCommon Consumer Products
HEAVY HALFHEAVY HALF LIGHT HALFLIGHT HALFPRODUCT (% USERS)PRODUCT (% USERS)
75%71%
Soups andSoups anddetergents (94%)detergents (94%) 25%
29%79% 21%
Toilet tissue (95%)Toilet tissue (95%)
Shampoo (94%)Shampoo (94%)
75% 25%17%17%
Paper towels (90%)Paper towels (90%)
Cake mix (74%)Cake mix (74%)
Cola (67%)Cola (67%)
83%83%
13%
5%
87%19%
Beer (41%)Beer (41%)
Dog food (30%)Dog food (30%)
Bourbon (20%)Bourbon (20%)
81%95%
©2000 Prentice Hall
Additional Segmentation Additional Segmentation CriteriaCriteria
Ethical Choice of Market TargetsEthical Choice of Market Targets Segment Interrelationships & Segment Interrelationships &
SupersegmentsSupersegments Segment-by-Segment Invasion PlansSegment-by-Segment Invasion Plans Intersegment CooperationIntersegment Cooperation
©2000 Prentice Hall
Five Patterns of Target Market Five Patterns of Target Market SelectionSelection
Single-segmentSingle-segmentconcentrationconcentration
ProductProductspecializationspecializationM1 M2 M3
P1
P2
P3
SelectiveSelectivespecializationspecialization
M1 M2 M3 P1
P2
P3
M1 M2 M3 Full marketFull marketcoveragecoverage
P1
P2
P3
MarketMarketspecializationspecialization
M1 M2 M3 P1
P2
P3
P1
P2
P3
M1 M2 M3
P = ProductP = ProductM = MarketM = Market
©2000 Prentice Hall
Segment-by-SegmentSegment-by-SegmentInvasion PlanInvasion Plan
Customer GroupsCustomer GroupsTruckersTruckersRailroadsRailroadsAirlinesAirlines
LargeLargecomputerscomputers
Prod
uct V
arie
ties
Prod
uct V
arie
ties
PersonalPersonalcomputerscomputers
Mid-sizeMid-sizecomputerscomputers
Company BCompany B Company CCompany CCompany ACompany A
©2000 Prentice Hall
ReviewReview
Identifying Market SegmentsIdentifying Market Segments Choosing Target MarketsChoosing Target Markets
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