2 Learning objectives1 Describe the characteristics of markets and market segments2 Explain the importance of market segmentation3 List the steps involved in segmenting markets4 Describe the bases commonly used to segment consumer markets5 Describe the bases for segmenting business markets
3 Learning objectives (cont.) 6 Discuss the criteria for successful market segmentation7 Discuss alternative strategies for selecting target markets8 Explain how and why organisations implement positioning strategies and how product differentiation plays a role9 Discuss global market segmentation and targeting issues
4 Define the term marketing Learning objective 1Describe the characteristics of markets and market segmentsDefine the term marketing
5 Market segmentation 1 Market Market segment Market segmentation People or organisations with needs or wants and the ability and willingness to buy.MarketsegmentA subgroup of people or organisations sharing one or more characteristics that cause them to have similar product needs.MarketsegmentationThe process of dividing a market into meaningful, relatively similar and identifiable segments or groups.
6 Describe four marketing management philosophies. Learning objective 2Describe four marketing management philosophies.Explain the importance of market segmentation
7 The importance of market segmentation 2The importance of market segmentationNearly all markets include people with different product needs and preferences.It helps to define needs and wants more precisely.Decision-makers can define objectives and allocate resources more accurately.More precise objectives = better evaluation of performance.
8 Describe four marketing management philosophies. Learning objective 3Describe four marketing management philosophies.List the steps involved in segmenting markets
9 Steps in segmenting a market 3Steps in segmenting a marketSelect a market for study.Choose bases for segmentation.Select descriptors.Profile and analyse segments.Select target markets.Design, implement and maintain marketing mix.
10 Learning objective 4Describe the bases commonly used to segment consumer markets
11 4Segmentation basesCharacteristics of individuals, groups or organisations usedto divide a total marketinto segments (variables).
12 Bases for segmentation 4Bases for segmentationGeographyDemographicsPsychographicsBenefits soughtUsage rate
13 Geographic segmentation 4Geographic segmentationSegmenting markets by region of the country or world, market size, market density or climate.
14 Geographic segmentation 4Geographic segmentationRegion of the country or worldMarket sizeMarket densityClimate
15 Benefits of regional segmentation 4Benefits of regional segmentationNew ways to generate sales in sluggish and competitive markets.Scanner data allow assessment of best-selling brands in region.Regional brands appeal to local preferences.React more quickly to competition.
16 Demographic segmentation 4Demographic segmentationSegmenting markets by age, gender, income, ethnic background and family life cycle.
17 Bases for demographic segmentation 4Bases for demographic segmentationAgeGenderIncomeEthnic backgroundFamily life cycle
30 Learning objective 6Discuss the criteria for successful market segmentation
31 Criteria for successful segmentation 6Criteria for successful segmentationSubstantialityIdentifiabilityAccessibilityResponsiveness
32 Criteria for segmentation 6Criteria for segmentationSubstantialitySegment must be large enough to warrant a special marketing mix.Identifiability/measurabilitySegments must be identifiable and their size measurable.AccessibilityMembers of targeted segments must be reachable with marketing mix.ResponsivenessUnless segment responds to a marketing mix differently, no separate treatment is needed.
33 Learning objective 7Discuss alternative strategies for selecting target markets
34 7Target marketA group of people or organisations for which an organisation designs, implements and maintains a marketing mix intended to meet the needs of that group, resulting in mutually satisfying exchanges.
35 Strategies for selecting target markets 7Strategies for selecting target marketsConcentratedstrategyUndifferentiatedMulti-segment
36 Undifferentiated targeting strategy 7Undifferentiated targeting strategyMarketing approach that views the market as one big market with no individual segments and thus requires a single marketing mix.
37 Undifferentiated targeting strategy (cont.) 7Undifferentiated targeting strategy (cont.)Advantages:Potential savings on production and marketing costsDisadvantages:Unimaginative product offeringsCompany more susceptible to competition
38 Concentrated targeting strategy 7Concentrated targeting strategyA strategy used to select one segment of a market for targeting marketing efforts.
40 Concentrated targeting strategy (cont.) 7Concentrated targeting strategy (cont.)Advantages:Concentration of resourcesMeets narrowly defined segmentSmall firms can competeStrong positioningDisadvantages:Segments too small or changingLarge competitors may market to niche segment
41 Multi-segment targeting strategy 7Multi-segment targeting strategyA strategy that chooses two or more well-defined market segments and develops a distinct marketing mix for each.