1. Market Segmentation, Targeting and Positioning Chapter 10

2. What is a market segment? A group of customers within the same general market who are defined by: Differences from other groups Similarities within the group regarding wants, buying preferences, or buying behavior

3. Target Market The specific market segment for which the marketer designs a particular marketing mix

4. Market segmentation The process of dividing the total market for a good or service into smaller, internally homogeneous groups

5. Benefits of market segmentation Small firms- allocate resources to specifically defined and selected markets Medium firms- rapid growth Large firms- reach fragmented groups

6. Process of segmentation Identify current and potential wants within the market Identify characteristics that distinguish among the segments Determine the size of segments and how well they are being served

7. Characteristics of good market segments Differences in consumers Similarities within the segment Measurable attributes Large enough Accessible

8. Limitations of segmentation “Too small” segments Misread differences and similarities Cost inefficient Too many spin-offs Short term vs. long-term orientation Unable to use certain media Firms compete in too many segments Confuse people Products get locked in a declining segment Slow to seek innovative possibilities

9. The first cut: Ultimate vs. Business consumers

10. Consumer markets Geographic segmentation Demographic segmentation Psychographic segmentation Behavioral segmentation Benefits desired Usage rate

11. Geographic segmentation Regional distribution City or metro size Urban, suburban, rural Climate Trends Global marketing Micromarketing

12. Demographic segmentation Income/education level Age Age effects Cohort effects Gender Family life cycle Occupation Ethnicity/race

13. Psychographic segmentation Personality Lifestyle VALS Attitudes Opinions

14. Behavioral segmentation Benefits desired Usage rate

15. Segmenting business markets Customer location Customer type Size Organization structure Purchase criteria Transaction conditions Buying situation Usage rate Purchase procedure

16. Target market Strategy Analyze demand Homogeneous Clustered Diffused Aggregation strategy Single segment strategy Multiple segment strategy

17. Forecasting market demand Quantitative methods Qualitative methods

18. Basic forecasting terms Market share Market factor Market potential Sales potential Sales forecast

19. Forecasting sales Table 10-3