1. Chapter 10 Identifying Market Segments and Selecting Target Markets by

2. Kotler on Marketing
“Don’t buy market share. Figure out how to earn it.”

3. Levels and Patterns of Market Segmentation
Levels of Market Segmentation
Mass marketing
Micromarketing
Segment marketing
Market segment
Sector
Flexible market offering
Naked solution
Discretionary options

4. Levels and Patterns of Market Segmentation
Niche Marketing
Niche
Local Marketing
Individual Customer Marketing
Mass-customization
Choiceboard
Customerization
Segments
Individuals

5. Steps in Market Segmentation, Targeting,and Positioning
1. Identify
segmentation
variables and
segment the
market
2. Develop
profiles of
resulting
segments
Market
Segmentation
3. Evaluate
attractiveness
of each
segment
4. Select the
target
segment(s)
Market
Targeting
5. Identify
possible
positioning
concepts for
each target
segment
6. Select,
develop, and
communicate
the chosen
concept
Market
Positioning

6. Basic Market-Preference Patterns
(a) Homogeneous
preferences
Sweetness
Creaminess
(b) Diffused
preferences
Creaminess
Sweetness
(c) Clustered
preferences
Creaminess
Sweetness

7. Bases for Segmenting Consumer Markets
Geographic
Region, City or Metro
Size, Density, Climate
Demographic
Age, Gender, Family size and Fife cycle, Race, Occupation, or Income ...
Lifestyle or Personality
Psychographic
Occasions, Benefits, Uses, or Attitudes
Behavioral

8. Bases for Segmenting Business Markets
Demographic
Operating Variables
Purchasing Approaches
Situational Factors
Personal Characteristics

9. Table 10-3: Major Segmentation Variables for Business Markets
Demographic
Industry: Which industries should we serve?
Company size: What size companies should we serve?
Location: What geographical areas should we serve?
Operating Variables
Technology: What customer technologies should we focus on?
User or nonuser status: Should we serve heavy users, medium users, light users, or nonusers?
Customer capabilities: Should we serve customers needing many or few services?
Purchasing Approaches
Purchasing-function organization: Should we serve companies with highly centralized or decentralized purchasing organizations?
Power structure: Should we serve companies that are engineering dominated, financially dominated, and so on?
See text for complete table

10. Effective Segmentation
Measurable
Effective Segmentation
Substantial
Size, purchasing power, profiles of segments can be measured.
Accessible
Segments must be large or profitable enough to serve.
Differential
Segments can be effectively reached and served.
Actionable
Segments must respond differently to different marketing mix elements & actions.
Must be able to attract and serve the segments.

11. Additional Segmentation Criteria
Ethical Choice of Market Targets
Segment Interrelationships & Supersegments
Segment-by-Segment Invasion Plans
Intersegment Cooperation

12. Target Marketing
Target marketing requires marketers to take three major steps:
Identify and profile distinct groups of buyers who differ in their needs and preferences (market segmentation).
Select one or more market segments to enter (market targeting).
For each target segment, establish and communicate the key distinctive benefit(s) of the company’s market offering (market positioning).

13. Market Targeting Evaluating and Selecting the Market Segments
Single-Segment Concentration
Selective Specialization
Product Specialization
Market Specialization
Full Market Coverage
Undifferentiated marketing
Differentiated marketing

14. Five Patterns of Target Market Selection
Single-segment
concentration
Selective
specialization
M1 M2 M3 P1 P2 P3
Product
specialization
M1 M2 M3 P1 P2 P3 P1 P2 P3
M1 M2 M3
P = Product
M = Market
Market
specialization
M1 M2 M3 P1 P2 P3
M1 M2 M3
Full market
coverage P1 P2 P3

15. Segment-by-Segment Invasion Plan
Customer Groups
Truckers
Railroads
Airlines
Company B
Company C
Company A
Large
computers
Product Varieties
Personal
Mid-size