market segmentation and targeting
DESCRIPTION
Principles of Marketing Unit 4. Market Segmentation and Targeting. Instructor: Safaa S. Y. Dalloul. Elements of Lecture. Marketing Segmentation. Level of Market Segmentation. Segmenting Consumer Market. Descriptive Characteristics. Behavioral Segmentation. - PowerPoint PPT PresentationTRANSCRIPT
Market Segmentation and
Targeting
Instructor: Safaa S. Y. Dalloul
Principles of MarketingUnit 4
Elements of Lecturehttp://safaadalloul.wordpress.com
Marketing Segmentation
Level of Market Segmentation
Segmenting Consumer Market
Segmenting Business Market
Market Targeting
Effective Segmentation Criteria
Evaluating and Selecting the Market Segments
Descriptive Characteristics
Behavioral Segmentation
Marketing Segmentation
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Marketing Segmentation
Mass marketing is the maximum exposure of product advertising to consumers. It's the opposite of niche marketing.
In mass marketing, the seller engages in the mass production, mass distribution, and mass promotion of one product for all buyers
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Marketing Segmentation
Micromarketing is a type of marketing strategy that has to do with targeting specific customers within a niche market.
Most companies are turning to micromarketing at one of four levels: segments, niches, local areas, and individuals.
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Marketing Segmentation
So we distinguish between car buyers who are primarily seeking low-cost basic transportation, those seeking a luxurious driving experience, and those seeking driving thrills and performance.
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Level of Market Segmentation
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Level of Market Segmentation
Segment Marketing
Market Segment: consists of a group of
customers who share a similar set of
needs and wants.
Marketer doesn’t create the segment but
identify & target it.
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Level of Market Segmentation
Segment Marketing
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Patterns of Market Segmentation
Creaminess
Sw
eetness
Level of Market Segmentation
Niche Marketing
Group of customers seeking a distinctive mix of
benefits who are ready to pay extra premium.
Marketers usually identify niches by dividing a
segment into sub segments.
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Level of Market Segmentation
Niche Marketing
For example, Progressive, a Cleveland auto insurer,
sells "nonstandard" auto insurance to risky drivers
with a record of auto accidents, charges a high price
for coverage and makes a lot of money in the
process.
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Level of Market Segmentation
Niche Marketing Traits
Distinct needs.
Less Competition
Niche has size, profit and growth potential.
Pay Premium
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ROLLS ROYCE CAR
Level of Market Segmentation
Local Marketing
Marketing programs tailored to the needs and wants
of local customer groups (trading areas,
neighborhoods, even individual stores).
Example: Spiderman Movie Part 3 was released in 5
different language in India.
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Customerization
Ultimate segmentation – segments of 1 or
customized marketing or one to one marketing.
Today customers are taking more individual
initiative in determining what and how to buy.
Level of Market Segmentationhttp://safaadalloul.wordpress.com
HW: Compare between segments of 1, customized marketing and one to one marketing.
Customerization
Customers log onto the Internet; Look up information and evaluations of product or service
offers.
Dialogue with suppliers, users, and product critics.
Design the product they want.
Level of Market Segmentationhttp://safaadalloul.wordpress.com
Level of Market Segmentation
Customerization
Customerization empowers consumers to design the
product and service offering of their choice.
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Level of Market Segmentation
Customerization
A company is customized when it is able to respond
to individual customers by customizing its products,
services, and messages on a one-to-one basis.
Customerization is certainly not for every company:
It may be very difficult to implement for complex
products such as automobiles. Customierzation can
raise the cost of goods by more than the customer is
willing to pay.
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Segmenting Consumer Market
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Segmenting Consumer Market
Two broad groups of variables are used to
segment consumer markets.
Descriptive characteristics: geographic,
demographic, and psychographic.
Behavioral considerations, such as consumer
responses to benefits, use occasions, or brands.
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Segmenting Consumer Market
Regardless of which type of segmentation
scheme is employed, the key is that the
marketing program can be profitably adjusted
to recognize customer differences.
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Segmenting Consumer Market
Descriptive Characteristics
Geographic Segmentation
Demographic Segmentation
Psychographic Segmentation
Behavioral Segmentation
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Segmenting Consumer Market
Descriptive Characteristics
Geographic Segmentation
Geographic segmentation calls for dividing the
market into different geographical units such
as nations, states, regions, counties, cities, or
neighborhoods.
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Segmenting Consumer Market
Descriptive Characteristics
Geographic Segmentation
The company can operate in one or a few
areas, or operate in all but pay attention to
local variations. Ex.- Mcdonalds globally, sell burgers aimed at local markets,
for example, burgers are made from lamb in India rather then
beef because of religious issues. In Mexico more chilli sauce is
added and so on.
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Segmenting Consumer Market
Descriptive Characteristics
Geographic Segmentation
Demographic Segmentation In demographic segmentation, the market is divided
into groups on the basis of variables such as age, family
size, family life cycle, gender, income, occupation,
education, religion, race, generation, nationality, and
social class.
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Segmenting Consumer Market
Descriptive Characteristics
Geographic Segmentation
Demographic Segmentation There are several reasons for the popularity of
demographic variables to distinguish customer groups.
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Segmenting Consumer Market
Descriptive Characteristics
Geographic Segmentation
Demographic Segmentation One reason is that consumer needs, wants, and usage
rates and product and brand preferences are often
associated with demographic variables. Another is that
demographic variables are easier to measure.
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Social ClassGender
Life Stage
Segmenting Consumer Market
Demographic Variables
Age
Generation
Income
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Social Class
Age
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Segmenting Consumer Market
Social Class
Life Stage
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Segmenting Consumer Market
Social Class
Gender
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Segmenting Consumer Market
Social Class
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Segmenting Consumer Market
Income
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Segmenting Consumer Market
Generation
Social Class
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Segmenting Consumer Market
Social Class
Segmenting Consumer Market
Descriptive Characteristics
Geographic Segmentation
Demographic Segmentation
Psychographic Segmentation
Psychographics is the science of using psychology and
demographics to better understand consumers.
In psychographic segmentation, buyers are divided into
different groups on the basis of psychological/personality
traits, lifestyle, or values.
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Segmenting Consumer Market
Descriptive Characteristics
Geographic Segmentation
Demographic Segmentation
Psychographic Segmentation
People within the same demographic group can exhibit
very different psychographic profiles.
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Segmenting Consumer Market
Behavioral Segmentation: In behavioral
segmentation, buyers are divided into groups on the basis
of their knowledge of, attitude toward, use of, or response to
a product.
Decision Roles: It is easy to identify the buyer for many products.
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Segmenting Consumer Market
People play five roles in a buying decision: Initiator, Influencer, Decider, Buyer, Users.
Different people are playing different roles, but all are crucial in the decision process and ultimate consumer satisfaction.
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HW: Explain the five roles that people play in a buying decision ?
Segmenting Consumer Market
Behavioral Variables
Many marketers believe that behavioral variables- occasions,
benefits, user status, usage rate, loyalty status, buyer-
readiness stage, and attitude-are the best starting points for
constructing market segments.
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Segmenting Consumer Market
Behavioral Variables | Occasions
Occasions can be defined in terms of the time of day, week,
month, year, or in terms of other well-defined temporal
aspects of a consumer's life.
Marketers also can try to extend activities associated
with certain holidays to other times of the year.
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Segmenting Consumer Market
Behavioral Variables | Occasions
For instance, while Christmas, Mother's Day, and Valentine's
Day are the three major gift-giving holidays, these and other
holidays account for just over half of the gifters' budgets.
That leaves the rest available throughout the year for
occasion-driven gift-giving: birthdays, weddings,
anniversaries, housewarming, and new babies.
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Segmenting Consumer Market
Behavioral Variables | Benefits
Buyers can be classified according to the benefits they seek.
Even car drivers who want to stop for gas may seek different
benefits.
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Segmenting Consumer Market
Behavioral Variables | User Status
Markets can be segmented into nonusers, ex-users, potential
users, first-time users, and regular users of a product.
Blood banks cannot rely only on regular donors to supply
blood; they must also recruit new first-time donors and
contact ex-donors.
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Segmenting Consumer Market
Behavioral Variables | Usage Rate
Markets can be segmented into light, medium, and heavy
product users. Heavy users are often a small percentage of
the market but account for a high percentage of total
consumption.
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Segmenting Consumer Market
Behavioral Variables | Buyer- Readiness Stage
A market consists of people in different stages of readiness to
buy a product. Some are unaware of the product, some are
aware, some are informed, some are interested, some desire
the product, and some intend to buy. The relative numbers
make a big difference in designing the marketing program.
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Segmenting Consumer Market
Behavioral Variables | Loyalty Status
Buyers can be divided into four groups according to brand
loyalty status:
– Hard-core loyals - Consumers who buy only one brand all the time.
– Split loyals - Consumers who are loyal to two or three brands.
– Shifting loyals - Consumers who shift loyalty from one brand to
another.
– Switchers - Consumers who show no loyalty to any brand.
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Segmenting Consumer Market
Behavioral Variables | Attitude
Five attitude groups can be found in a market: enthusiastic,
positive, indifferent, negative, and hostile.
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Segmenting Business Market
Bases for Segmenting Business Markets
Business markets can be segmented with some of the same
variables used in consumer market segmentation, such as
geography, benefits sought, and usage rate, but business
marketers also use other variables.
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Segmenting Business Market
Demographic
Industry: Which industries should we serve?
Company size: What size companies should we serve?
Location: What geographical areas should we serve?
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Segmenting Business Market
Operating Variables
Technology: What customer technologies should we focus
on?
User or nonuser status: Should we serve heavy users,
medium users, light users, or nonusers?
Customer capabilities: Should we serve customers needing
many or few services?
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Segmenting Business Market
Purchasing Approaches
Purchasing-function organization: Should we serve
companies with highly centralized or decentralized
purchasing organizations?
Power structure: Should we serve companies that are
engineering dominated, financially dominated, and soon?
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Segmenting Business Market
Purchasing Approaches
Nature of existing relationships: Should we serve companies
with which we have strong relationships or simply go after the
most desirable companies?
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Segmenting Business Market
Purchasing Approaches
Nature of existing relationships: Should we serve companies
with which we have strong relationships or simply go after the
most desirable companies?
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Segmenting Business Market
Purchasing Approaches
General purchase policies: Should we serve companies that
prefer leasing? Service contracts? Systems purchases?
Sealed bidding?
Purchasing criteria: Should we serve companies that are
seeking quality? Service? Price?
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Segmenting Business Market
Situational Factors
Urgency: Should we serve companies that need quick and
sudden delivery or service?
Specific application: Should we focus on certain applications
of our product rather than all applications?
Size of order: Should we focus on large or small orders?
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Segmenting Business Market
Personal Characteristics
Buyer-seller similarity: Should we serve companies whose
people and values are similar to ours?
Attitudes toward risk: Should we serve risk-taking or risk-
avoiding customers?
Loyalty: Should we serve companies that show high loyalty to
their suppliers?
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