Sultan Ahmed Topic 05

Sultan Ahmed You would be able to answer the following questions after reading the chapter: Definitions: segment marketing, customerization, What are the different levels/steps of market segmentation? In what ways can a company divide a market into segments? Explain the characteristics of demographic segmentation with examples. Explain the characteristics of behavioral segmentation with examples. What are the requirements for effective segmentation? How should business markets be segmented? How should a company choose the most attractive target markets? How market coverage strategies influence market targeting? Learning Goals of the Topic

Sultan Ahmed Effective Targeting Requires… Identify and profile distinct groups of buyers who differ in their needs and preferences. Select one or more market segments to enter. Establish and communicate the distinctive benefits of the market offering.

Sultan Ahmed Steps in Market Segmentation, Targeting, and Positioning Market Segmentation 1. Identify bases for segmenting the market 2. Develop segment profiles Market Segmentation 1. Identify bases for segmenting the market 2. Develop segment profiles Market Targeting 3. Develop measure of segment attractiveness 4. Select target segments Market Targeting 3. Develop measure of segment attractiveness 4. Select target segments Market positioning 5. Develop positioning for target segments 6. Develop a marketing mix for each segment Market positioning 5. Develop positioning for target segments 6. Develop a marketing mix for each segment

Sultan Ahmed Four levels of Micromarketing Segments Local areasIndividuals Niches

Sultan Ahmed Segment Marketing Targeting a group of customers who share a similar set of needs and wants.

Sultan Ahmed Basic Market Preference Patterns

Sultan Ahmed Customerization Combines operationally driven mass customization with customized marketing in a way that empowers consumers to design the product and service offering of their choice.

Sultan Ahmed Segmenting Consumer Markets Geographic Demographic Psychographic Behavioral

Sultan Ahmed

Sultan Ahmed Demographic Segmentation Age and Life Cycle Life Stage Gender Income Generation Social Class

Sultan Ahmed Behavioral Segmentation Decision Roles Initiator Influencer Decider Buyer User Behavioral Variables Occasions Benefits User Status Usage Rate Buyer-Readiness Loyalty Status Attitude

Sultan Ahmed Behavioral Segmentation Breakdown

Sultan Ahmed Segmenting for Business Markets Demographic Operating Variable Purchasing Approaches Situational Factors Personal Characteristics Personal Characteristics

Sultan Ahmed Segmenting for Business Markets Demographic segmentation –Industry, company size, location Operating variables –Technology, usage status, customer capabilities Purchasing approaches Situational factors –Urgency, specific application, size of order Personal characteristics –Buyer-seller similarity, attitudes toward risk, loyalty

Sultan Ahmed Size, purchasing power, profiles of segments can be measured. Segments can be effectively reached and served. Segments are large or profitable enough to serve. Measurable Accessible Substantial Differential Actionable Segments must respond differently to different marketing mix elements & programs. Effective programs can be designed to attract and serve the segments. Effective Segmentation Criteria

Sultan Ahmed Market Targeting Evaluating Market Segments Segment Size and Growth –Analyze current sales, growth rates and expected profitability for various segments. Segment Structural Attractiveness –Consider effects of: competitors, availability of substitute products and, the power of buyers & suppliers. Company Objectives and Resources –Company skills & resources needed to succeed in that segment(s). –Look for Competitive Advantages.

Sultan Ahmed Segment 1 Segment 2 Segment 3 Segment 1 Segment 2 Segment 3 Company Marketing Mix Company Marketing Mix Company Marketing Mix Company Marketing Mix Company Marketing Mix 1 Company Marketing Mix 1 Company Marketing Mix 2 Company Marketing Mix 2 Company Marketing Mix 3 Company Marketing Mix 3 Market A. Undifferentiated Marketing B. Differentiated Marketing C. Concentrated Marketing Market Targeting Market Coverage Strategies

Sultan Ahmed Patterns of Target Market Selection

Sultan Ahmed Patterns of Target Market Selection

Sultan Ahmed Patterns of Target Market Selection