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Chapter 4 Identifying Market Segments and Selecting Target Markets.

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2 Chapter 4 Identifying Market Segments and Selecting Target Markets

3 The Learning Objectives Levels and Patterns of Marketing Segmentation Marketing Target Positioning Strategy

4 Market Segmentation Dividing a market into distinct groups of buyers on the basis of needs,characteristics,or behavior who might require separate products or marketing mixes.

5 Segment Market A group of consumers who respond in a similar way to a given set of marketing effort.

6 Market targeting The process of evaluating each market segment ’ s attractiveness and selecting one or more segment to enter.

7 Marketing positioning Arranging for a product to occupy a clear,distinctive, and desirable place relative to competing products in the minds of target consumers.

8 Levels of market segmentation Mass marketing Segment marketing Niche marketing

9 micromarketing Local marketing Individual Marketing

10 Discussion 1. How do you think the relationship between local marketing and international marketing? 2. How to interpret One – one marketing? (eg. Del: smart marketing)

11 Steps in Market Segmentation, Targeting,and Positioning 1.Identify segmentation variables and segment the market 2.Develop profiles of resulting segmentsMarketSegmentation 3. Evaluate attractiveness of each segment 4. Select the target segment(s)MarketTargeting 5. Identify possible positioning concepts for each target segment 6. Select, develop, and communicate the chosen positioning conceptMarketPositioning

12 Basic Market-Preference Patterns (a) Homogeneous preferencesSweetness Creaminess (c) Clustered preferencesCreaminess Sweetness (b) Diffused preferencesCreaminess Sweetness

13 Market-Segmentation Procedure ¶Survey – Motivations – Attitudes – Behavior ·Analysis – Factors – Clusters ¸Profiling

14 Segmenting consumer markets(p252) Geographic Segmentation Demographic Psychographic Behavioral

15 Bases for Segmenting Consumer Markets Occasions, Benefits, Uses, or Attitudes Behavioral Geographic Region, City or Metro Size, Density, Climate Demographic Age, Gender, Family size and Fife cycle, Race, Occupation, or Income... Lifestyle or Personality Psychographic

16 Discussion How to choose the segmenting variables? Consider the following products,please list the segmenting standard for each product and explain the reasons for them.; 2.shampoo; 3. Life insurance;

17 Bases for Segmenting Business Markets Demographic Operating Variables Purchasing Approaches Situational Factors Personal Characteristics

18 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 Segmentation

19 Heavy and Light Users of Common Consumer Products HEAVY HALF LIGHT HALF PRODUCT (% USERS) 75% 71% Soups and detergents (94%) 25% 29% 79%21% Toilet tissue (95%) Shampoo (94%) 75%25% 17% Paper towels (90%) Cake mix (74%) Cola (67%) 83% 13% 5 % 87% 19% Beer (41%) Dog food (30%) Bourbon (20%) 81% 95%

20 Additional Segmentation Criteria Ethical Choice of Market Targets Segment Interrelationships & Supersegments Segment-by-Segment Invasion Plans Intersegment Cooperation

21 Five Patterns of Target Market SelectionSingle-segmentconcentration Productspecialization M1 M2 M3 P1 P2 P3 Selectivespecialization M1 M2 M3 P1 P2 P3 M1 M2 M3 Full market coverage P1 P2 P3 Marketspecialization M1 M2 M3 P1 P2 P3 P1 P2 P3 M1 M2 M3 P = Product M = Market

22 2.Market Targeting Target market Undifferentiated marketing Differentiated marketing Concentrated Marketing

23 Undifferentiated Marketing A market-coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer.

24 Differentiated marketing A market-coverage strategy in which a firm decides to target several market segments and designs separate offers for each.

25 Concentrated marketing A market-coverage strategy in which a firm goes after a large share of one or a few submarkets.

26 Discussion How to choose the Target market?

27 3.Positioning Product position Competitive advantage Value propositioning

28 Product Position The way the product is defined by consumers on important attributes----the place the product occupies in consumers ’ minds relative to competing product.

29 The BCG Competitive Advantage Matrix Volume FragmentedStalemated Specialized Size of the Advantage Advantage Small Large Number of Approaches to Achieve Advantage FewMany

30 Product Differentiation Form Fea- tures Perfor- mance Quality Conform- ance Quality Dura- bility Relia- bility Repair- ability StyleDesign

31 Delivery Services Differentiation Ordering Ease Ordering Ease Maintenance & Repair Maintenance & Repair Customer Training Customer Training Installation Customer Consulting Customer Consulting Miscellaneous Services

32 Differentiation Personnel Channel

33 MediaAtmosphere Symbols Events Image Differentiation

34 Differences Worth Establishing Affordable Superior Profitable Preemptive Distinctive Important

35 Positioning is the act of designing the company’s offering and image to occupy a distinctive place in the the target market’s mind. P P 298

36 Perceptual Map 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 -1.6 -1.4 -1.2 -1.0 -0.8 -0.6 -0.4 -0.2 -0.2-0.4-0.6-0.8 MagicMountain Japanese Deer Park BuschGardens Knott’sBerryFarm LionCountrySafariMarineland of the PacificDisneyland Economical Fun rides Exercise Fantasy Good food Easy to reach Educational,animals Little waiting Live shows

37 Sales & Profit Life CyclesIntroductionGrowthMaturityDecline Time Sales & profits ($)

38 Four Introductory Marketing Strategies Rapid-skimmingstrategy Rapid-penetrationstrategySlow-penetrationstrategy Slow-skimmingstrategy Price Low HighPromotionHighLow

39 Case study 香港大班月饼 Background

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