1. Market Segmentation and Target Marketing

2. Marketers rarely go after the entire market with one product, brand, or service. Why?

3. Positioning through marketing mix program Selecting market to target Determining market segmentation Identify markets with unfulfilled needs Selecting a target market(s) Determining market segmentation Identifying markets with unfulfilled needs The Target Marketing Process © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

4. Identifying Markets What is a market? People with both the desire and ability to buy a specific product.

5. Market Segmentation What is market segmentation? Dividing up a market into distinct groups that have common needs and will respond similarly to a marketing action.

6. Behavior Benefits Outlets Benefits Outlets Usage Rate Psychographic Geographic Demographic Psychographic Demographic Geographic Bases for Segmentation Customer Characteristics Customer Characteristics Behavioral © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Awareness

7. Bases for Segmentation Geographic – the division of a market into units based on nations, regions, states, cities, or neighborhoods. Demographic - the division of a market based on statistical data such as age, gender, income, occupation, education, race, or family life cycle. Psychographic – the division of a market based on quantitative measures of lifestyle, personality, and values. (VALS-identifies eight segments based on two dimensions)

8. FIGURE 9-4 Segmentation variables and breakdowns for U.S. consumer markets

10. Identify Your VALS Profile

11. Bases for Segmentation Geodemographics - the market is divided based on a combination of demographic, lifestyle, and geographic variables. (PRIZM) Behavioral - the market is divided on the basis of one or more characteristics of the consumer’s relationship to the product. Example - Benefits sought

12. Examples of Some PRIZM Clusters © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin HIGH LOW $

13. Selecting a Target Market Determining how many segments to enter Undifferentiated strategy Multisegment strategy Concentrated strategy Determining which segments to target Size and Sales potential Growth opportunities Cost Competition Compatibility

14. Positioning What is product positioning? The process where marketers try to create a product image or identity in the minds of their target market relative to competitive products.

15. Developing the Marketing Mix Program Product- features, quality, services, branding, packaging Price – list price, discounts, credit terms Place – outlets, channels, coverage, stock levels Promotion- advertising, public relations, personal selling, direct marketing, sales promotions