1. Gilbert A. Churchill, Jr. J. Paul Peter Chapter 8 Market Segmentation Marketing

2. Basic Definitions Slide 8-1 Approach Market Market Segmentation Definition Target Market Individuals or organizations with the desire and ability to buy goods and services The particular market segment that the organization selects to serve. The process of dividing a market into groups of potential buyers who have similar needs and wants, value perceptions, or purchasing behavior

3. Approaches to Serving Markets Table 8.1 Slide 8-2 Approach Mass Marketing A single marketing mix for the entire market Segment Marketing DescriptionExamples Individual Marketing Phone service, WEB pages Niche Marketing A single marketing mix for one segment of the market Women's Workout World (exercise facilities for women); American Association for Retired Persons (lobbying and membership services for people over 50) McDonald’s (Happy Meals for young children, Big Macs for Teens, Arch Deluxe for adults); Toshiba copiers (several sizes and features to meet different levels of business needs) Personalized amenities for repeat guests at Ritz-Carlton hotels; management consulting services tailored to an organization’s needs A marketing mix customized for an individual or organization Differentiated Marketing Separate marketing mixes for two or more segments of the market

4. Market Segmentation used to develop a competitive advantage Market Potential - the total purchases that buyers in a segment will likely make during a specified period of time, given a specified level of marketing activity Measurability - be able to measure its size and characteristics Responsiveness - respond differently to some aspect of the 4P than other segments Accessibility - be able to reach members of target segment with customized marketing mixes Criteria for Successful Market Segmentation Criteria for Successful Market Segmentation Slide 8-3

5. P & G Segmentation - Detergent Market 53% market share of the $3.2 billion market TIDE - “Tide’s in, dirt out” CHEER - “all temperature - Cheer” BOLD - “cleans, soften,and controls static” GAIN - “freshens like sunshine” ERA - “built- in stain remover” DASH - “attack tough dirt” OXYDOL - “makes clothes bright” SOLO - “liquid detergent with fabric softener DREFT - “a clean you can trust” IVORY SNOW - “mild, gentle soap for baby clothes ARIEL - “tough cleaner” Slide 8-4

6. Mass/Undifferentiated Marketing Slide 8-5 Price Promotion Placement Product The Market Everyone

7. Niche Marketing Slide 8-6 Price Promotion Placement Product The Market Market Segment

8. Differentiated Marketing Slide 8-7 Price Promotion Placement Product The Market Market Segment Price Promotion Placement Product

9. Individual Marketing Slide 8-8 Price Promotion Placement Product The Market Customer Price Promotion Placement Product Price Promotion Placement Product Price Promotion Placement Product Customer

10. Some Bases for Segmenting Consumer Markets Slide 8-9 Demographic Segmentation Geographic PsychologicalBenefit Behavior Southwest Airlines Frito-Lay Snacks Colgate Toothpaste Campbell Soup Levis Dockers Table 8.2

11. VALS2 Lifestyle Categories - Consumer Markets Slide 8-10 Figure 8.2 Resources Abundant Self-Orientation Principal Oriented Status Oriented Action Oriented Minimal Fulfilleds Achievers Experiencers Believers Strivers Makers Strugglers Actualizers

12. Some Bases for Segmenting Organizational Markets Slide 8-11 Segmentation Geographic Customer Type Organizational Buyer Behavior Flowers Industries Baked Goods Intel Computer Chips Apple Computer Newton Pocket Computer Table 8.3

13. The Process of Market Segmentation Slide 8-12 Figure 8.5 Analyze Customer Product Relationship Investigate Segmentation Bases Develop Product Positioning Select Segmentation Strategy

14. Product Position Positioning Bases Attribute BMW - performance Price and Quality Dillards VS KMart Use or Application Gatorate Product User J&J Baby Shampoo Product Class Parkay, Caress Competitor VISA VS AMEX The perception of the product relative to competing products in the minds of potential buyers. Slide 8-13

15. Sample Positioning Map: Automobiles Slide 8-14 Figure 8.6 TraditionalSporty Functional Luxurious Lexus BMW Pontiac Mercedes Cadillac Lincoln Chrysler Buick Oldsmobile Porsche Chevrolet Nissan Toyota Saturn VW Ford Dodge Plymouth Mercury