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©2000 Prentice Hall

ObjectivesObjectives

Identifying Market SegmentsIdentifying Market Segments Choosing Target MarketsChoosing Target Markets


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


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


Market-Segmentation Market-Segmentation ProcedureProcedure

SurveySurveyMotivationsMotivationsAttitudesAttitudesBehaviorBehavior

AnalysisAnalysisFactorsFactorsClustersClusters

ProfilingProfiling


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


Bases for Segmenting Bases for Segmenting Business MarketsBusiness Markets

DemographicDemographic Operating VariablesOperating Variables Purchasing ApproachesPurchasing Approaches Situational FactorsSituational Factors Personal CharacteristicsPersonal Characteristics


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


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%


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


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


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


ReviewReview

Identifying Market SegmentsIdentifying Market Segments Choosing Target MarketsChoosing Target Markets

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