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Chapter 6 Ver 2e1 Chapter 6 ©2000 South-Western College Publishing Segmenting and Targeting Markets Prepared by Deborah Baker Texas Christian University.

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Presentation on theme: "Chapter 6 Ver 2e1 Chapter 6 ©2000 South-Western College Publishing Segmenting and Targeting Markets Prepared by Deborah Baker Texas Christian University."— Presentation transcript:

1 Chapter 6 Ver 2e1 Chapter 6 ©2000 South-Western College Publishing Segmenting and Targeting Markets Prepared by Deborah Baker Texas Christian University

2 Chapter 6 Ver 2e2 Chapter 6 Objectives 1.Describe the characteristics of markets and market segments. 2.Explain the importance of market segmentation. 3.Discuss criteria for successful market segmentation. 4.Describe the bases commonly used to segment consumer markets. (continued) ©2000 South-Western College Publishing

3 Chapter 6 Ver 2e3 Chapter 6 Objectives 5.Describe the bases for segmenting business markets. 6.List the steps involved in segmenting markets. 7.Discuss alternative strategies for selecting target markets. ©2000 South-Western College Publishing (continued)

4 Chapter 6 Ver 2e4 Chapter 6 Objectives 8.Explain how and why firms implement positioning strategies and how product differentiation plays a role. 9.Discuss global marketing segmentation and targeting issues. ©2000 South-Western College Publishing

5 Chapter 6 Ver 2e5 Market Segmentation A market is... (1) people or organizations with (2) needs or wants, and with (3) the ability and (4) the willingness to buy. A group of people that lacks any one of these characteristics is not a market. ©2000 South-Western College Publishing

6 Chapter 6 Ver 2e6 Importance of Market Segmentation  Markets have a variety of product needs and preferences  Marketers can better respond to increase in competition  Marketers can better define customer needs  Decision makers can define objectives and allocate resources more accurately ©2000 South-Western College Publishing

7 Chapter 6 Ver 2e7 Criteria for Market Segments Substantiality Identifiability Accessibility Responsiveness Criteria for Successful Segmentation ©2000 South-Western College Publishing

8 Chapter 6 Ver 2e8 ©2000 South-Western College Publishing Bases for Segmenting Consumer Markets Usage Rate Benefits Sought Psychographics Demographics Geography Characteristics Used to Segment Markets

9 Chapter 6 Ver 2e9 Geographic Segmentation Bases for Segmenting Consumer Markets  Region of the country or world  Market size  Market density  Climate ©2000 South-Western College Publishing

10 Chapter 6 Ver 2e10 Bases for Segmenting Consumer Markets Demographics  Age  Gender  Income  Ethnic background  Family Life Cycle ©2000 South-Western College Publishing

11 Chapter 6 Ver 2e11 Family Life Cycle Age Marital Status Children ©2000 South-Western College Publishing

12 Chapter 6 Ver 2e12 Bases for Segmenting Consumer Markets Psychographics Psychographic Segmentation Personality Motives Lifestyles Geodemographics ©2000 South-Western College Publishing

13 Chapter 6 Ver 2e13 VALS 2 Dimensions Action-oriented Experi- encers Makers Principle-oriented Status-oriented Fulfillers Believers Actualizers Achievers Strivers Strugglers Minimal Resources Abundant Resources ©2000 South-Western College Publishing

14 Chapter 6 Ver 2e14 Bases for Segmenting Consumer Markets Benefit Segmentation  Customers are grouped into market segments according to the benefits they seek from the product. Usage Rate  Market is divided based on product consumption  80/20 Principle  80/20 Principle holds that 20% of customers generate 80% of demand ©2000 South-Western College Publishing

15 Chapter 6 Ver 2e15 ©2000 South-Western College Publishing Bases for Segmenting Business Markets Geographic Customer Type Customer Size Product Use BusinessMarketsBusinessMarkets Purchasing Criteria Purchasing Strategy Importance Personal Characteristics Micro- segmentation Micro- segmentation Macro- segmentation Macro- segmentation

16 Chapter 6 Ver 2e16 Steps in Segmenting a Market Select a market for study Choose bases for segmen- tation Select descrip- tors Profile and analyze segments Select target markets Design, imple- ment, maintain mkting mix ©2000 South-Western College Publishing

17 Chapter 6 Ver 2e17 Strategies for Selecting Target Markets Concentrated Strategy Concentrated Strategy Undifferentiated Strategy Undifferentiated Strategy Multisegment Strategy Multisegment Strategy ©2000 South-Western College Publishing

18 Chapter 6 Ver 2e18 Undifferentiated Strategy Advantages Advantages:  Potential savings on production and marketing costs Disadvantages Disadvantages:  Unimaginative product offerings  Company more susceptible to competition ©2000 South-Western College Publishing

19 Chapter 6 Ver 2e19 Concentrated Strategy Advantages Advantages:  Concentration of resources  Meet needs of narrowly defined segment  Small firms can compete  Strong positioning Disadvantages Disadvantages:  Segments too small, or changing  Large competitors may effectively market to niche segment ©2000 South-Western College Publishing

20 Chapter 6 Ver 2e20 Multisegment Strategy Advantages Advantages:  Greater financial success  Economies of scale Disadvantages Disadvantages:  High costs  Cannibalization ©2000 South-Western College Publishing

21 Chapter 6 Ver 2e21 Costs of Multisegment Targeting $ Product design costs $ Production costs $ Promotion costs $ Inventory costs $ Marketing research costs $ Management costs $ Cannibalization ©2000 South-Western College Publishing

22 Chapter 6 Ver 2e22 Positioning Cadillac High Price Low Price ConservativeConservative ExpressiveExpressive Buick Chevrolet Oldsmobile Pontiac Perceptual Mapping (General Motors--1989) ©2000 South-Western College Publishing

23 Chapter 6 Ver 2e23 Attribute Price and Quality Use or Application Product User Product Class Competitor Positioning Bases ©2000 South-Western College Publishing

24 Chapter 6 Ver 2e24 Global Market Segmentation  Global Market Standardization  Micromarketing Trends ©2000 South-Western College Publishing


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