1. © 2012 McGraw-Hill Ryerson Ltd. Market Segmentation Key to success 0 Balance Satisfying Customer Needs Profitability LO 3

2. © 2012 McGraw-Hill Ryerson Ltd. 10 Steps In Market Segmentation 1 LO 3

3. © 2012 McGraw-Hill Ryerson Ltd. Step 1: Review Company Objectives Review strategic company objectives. – Clear – Quantifiable 2 LO 3

4. © 2012 McGraw-Hill Ryerson Ltd. Step 2: Identify objectives 3 LO 3 Identify specific business unit objectives.

5. © 2012 McGraw-Hill Ryerson Ltd. Step 3: Identify Consumer Needs 4 Common Interests Evolving Trends Market Shifts Consideration of Other Countries Consumer Perspective LO 3 Identify consumer/customer needs and common characteristics in the market.

6. © 2012 McGraw-Hill Ryerson Ltd. Step 4: Cluster Common Consumer Variables Cluster common consumer/customer variables to create meaningful market segments. Clusters = Segments in the market Very important: Review the clusters from a consumer perspective – Cereal: High fibre vs. health conscious 5 LO 3

7. © 2012 McGraw-Hill Ryerson Ltd. Step 4: Cluster Common Consumer Variables 6 LO 3

8. © 2012 McGraw-Hill Ryerson Ltd. Step 5: Conduct a SWOT Analysis 7 Opportunities and the ability of the company to compete LO 3 Conduct SWOT analyses on the segments to determine strengths, weaknesses, opportunities, and threats.

9. © 2012 McGraw-Hill Ryerson Ltd. Step 6: Identify Best Segment Identify the segment that best meets strategic company objectives. Opportunities and threats relative to company objectives Uncovers opportunity segments 8 LO 3

10. © 2012 McGraw-Hill Ryerson Ltd. Step 7: Marketing Programs & Budget Identify marketing programs and budget requirements needed for this segment. Recommended marketing program Full financial evaluation 9 LO 3

11. © 2012 McGraw-Hill Ryerson Ltd. Step 8: Sales Forecast Create a sales forecast for this segment. Estimated sales potential 10 LO 3

12. © 2012 McGraw-Hill Ryerson Ltd. Step 9: Profit and Loss Analysis Conduct a profit-and-loss financial analysis for this segment. Determination of the financial viability Ability to make a rational decision 11 LO 3

13. © 2012 McGraw-Hill Ryerson Ltd. 10. Measure 12 LO 3 Check financial forecasts against specific business unit objectives.