1. Steps in the Target Marketing Process

2. Step 1: Segmentation
Segmentation is the process of dividing a larger market into smaller pieces based on one or more meaningful, shared characteristics
Segmentation variables are used to divide the market into smaller slices

3. Segmenting Consumer Markets
Demographics
Psychographics
Behavior

4. Vans
Young shredders
are a profitable
target segment

5. Demographic Dimensions
Age
Gender
Family structure
Income and social class
Race and ethnicity
Geography

6. Age Groups
Children
Teens
Generation X
Baby Boomers
Elderly

7. Avon Mark
Avon is targeting a younger consumer with its “mark” brand

8. Nip Tuck
The show Nip/Tuck shows how far some baby boomers will go for a youthful appearance

9. Psychographics
Psychographics segments markets in terms of shared attitudes, interests, and opinions
Segments include demographic information such as age and income, but also includes richer descriptions
Some organizations develop their own psychographic segments for their consumers, but others utilize national systems (VALS by SRI International)

10. VALS

11. Segmenting by Behavior
Behavioral segmentation slices consumers on the basis of how they act toward, feel about, or use a product
Users versus nonusers
Heavy, moderate, light users
Usage occasions

12. Tropicana
Tropicana Essentials targets consumers who want extra vitamins and no sodium

13. Segmenting Industrial Markets
Organizational demographics
firm size
number of facilities
domestic or multinational
type of business
production technology utilized

14. Hoovers Online
Hoovers Online provides marketing intelligence on private and public companies

15. Step 2: Targeting Evaluating Market Segments
Developing Segment Profiles
Choosing a Targeting Strategy

16. Evaluating Market Segments
A viable target segment should satisfy these requirements:
Are members of the segment similar to each other but different from other segments?
Can marketers measure the segment?
Is the segment large enough to be profitable?
Can marketing communications reach the segment?
Can the marketer serve the segment’s needs?

17. Developing Segment Profiles
A profile is a description of the typical customer in that segment
RJ Reynolds’ “Dakota” Profile of the “Virile Female”: Her favorite pastimes are cruising, partying, going to hot-rod shows and tractor pulls with her boyfriend, and watching evening soap operas. Her chief aspiration is to get married in her early twenties.”

18. Choosing a Targeting Strategy
Differentiated
Marketing
Undifferentiated
Marketing
Concentrated
Marketing
Customized
Marketing

19. Undifferentiated Marketing
Appeals to a broad spectrum of people
Efficient due to economies of scale
Effective when most consumers have similar needs
Example: Wal-Mart, Gas stations (S-Oil)
HomeEver?

20. Differentiated Marketing
Develops one or more products for each of several customer groups with different product needs
Appropriate when consumers are choosing among well-known brands with distinctive images and it is possible to identify one or more segments with distinct needs for different types of products
Example: Elseve, L’Oreal, Lancome
Hyundai, Kia

21. Concentrated Marketing
Entails focusing efforts on offering one or more products to a single segment
Useful for smaller firms that do not have the resources to serve all markets
Example: Hard Candy

22. Hard Candy Hard Candy uses a concentrated targeting strategy to target
twenty-something
women

23. Customized Marketing
Segments are so precisely defined that products are offered to exactly meet the needs of each individual
Example: hair stylists
Mass customization is a related approach in which a company modifies a basic good to meet the needs of an individual
Example: Proctor & Gamble’s products at Reflect.com
Dell Computers

24. Developing a Positioning Strategy
Analyze the competitors’ positions in the marketplace
Offer a product with a competitive advantage
Finalize the marketing mix
Evaluate the target market’s response so modifications to the positioning strategy can be made (repositioning)

25. The Brand Personality
A positioning strategy attempts to create a brand personality for a product - a distinctive image that captures its character and benefits
How do marketers determine where their products actually stand in the minds of consumers?
Perceptual mapping

26. Maui
Brand personalities often are reflected in logos

27. Perceptual Map

28. Customer Relationship Management
A CRM strategy allows a company to identify its best customers, stay on top of their needs, and increase their satisfaction
CRM is about communicating with customers one on one
CRM views customers as partners

29. Steps in the CRM Process
Identify customers
Differentiate customers
Interact with customers
Customize for your customers

30. Characteristics of CRM
Share of Customer
Lifetime Value of the Customer
Customer Equity
A Greater Focus on High-Value Customers