IDENTIFYING MARKET SEGMENTS AND TARGETS CHAPTER

Market Segmentation Market segmentation links market needs to an organization’s marketing program

Four levels of Micromarketing Segments Niches Local areas Individuals

Niche Marketers : Guerillas against Gorillas Enterprise Rent-A-Car targets the insurance- replacement market

Baskin Robbins focuses on Local Marketing and stopped advertising in 2004 to focus on “three-mile marketing”

Ways to segment markets Geographical segmentation Demographic segmentation Most popular segmentation Psychographic segmentation Lifestyle, social class, and personality-based segmentation Behavioral segmentation Goal 2: List and discuss major bases for segmentation

Geographic Segmentation Variables World region or country U.S. region State City Neighborhood City or metro size Density Climate Goal 2: List and discuss major bases for segmentation

Demographic Segmentation Variables Age Gender Family size Family life cycle Income Occupation Education Religion Race Generation Nationality Goal 2: List and discuss major bases for segmentation

Behavioral Segmentation Variables Occasions Benefits User status User rates Loyalty status Readiness stage Attitude toward the product Goal 2: List and discuss major bases for segmentation

Criteria to Use in Forming the Segments Measurable Size, purchasing power, and profile of segment Accessible Can be reached and served Substantial Large and profitable enough to serve Differentiable Respond differently Actionable Effective programs can be developed

Positioning The place the product occupies in consumers’ minds relative to competing products Typically defined by consumers on the basis of important attributes Involves implanting the brand’s unique benefits and differentiation in the customer mind Positioning maps that plot perceptions of brands are commonly used

A perceptual map to suggest a strategy for positioning chocolate milk to reach adults

Market Segmentation Market segmentation involves aggregating prospective into groups that (1) have common needs and (2) will respond similarly to a marketing action. Slide 9-64

Product Differentiation Product differentiation is a strategy that involves a firm’s using different marketing mix activities to help consumers perceive the product as being different and better than competing products. Slide 9-66

Market-Product Grid A market-product grid is a framework to relate the segments of a market to products offered or potential marketing actions by the firm. Slide 9-67

Usage Rate The usage rate is the quantity consumed or patronage during a specific period of time. Slide 9-69

80/20 Rule The 80/20 rule is a concept that suggests 80 percent of a firm’s sales are obtained from 20 percent of its customers. Slide 9-70

Product Positioning Product positioning refers to the place an offering occupies in consumers’ minds on important attributes relative to competitive offerings. Slide 9-71

Perceptual Map A perceptual map is a means of displaying or graphing in two dimensions the location of products or brands in the minds of consumers to enable a manager to see how consumers perceive competing products or brands and then take marketing actions. Slide 9-72