1. CHAPTER 7 Target Marketing Strategies
Real People, Real Choices
CHAPTER 7 Target Marketing Strategies

2. Chapter Objectives
Understand the need for market segmentation
Know the different dimensions marketers use to segment consumer & industrial markets
Explain how marketers evaluate & select potential market segments

3. Chapter Objectives
Explain how marketers develop a targeting strategy
Understand how a firm develops & implements a positioning strategy
Know how marketers practice customer relationship management to increase long-term success and profits

4. 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
Can segment a variety of ways

5. Segmenting Consumer Markets
Demographics
Psychographics
Geographics
Behaviors

6. Demographic Dimensions
Age
Gender
Family structure
Income & social class
Race & ethnicity

7. Age
Children
Teens
Generation Y
Who is Gen Y?
Baby Boomers
Elderly

8. The Hispanic Market Segment
Brand loyalty
Highly concentrated by national origin
Youthful (median age is 23.6)
3.5 people in average household
Receptive to relationship building

9. Psychographics
Segments markets in terms of shared attitudes, interests, & opinions
Segments include demographic as well as includes richer descriptions
VALS example
Achievers

10. Geographics
Regional distinctions
Heart disease density
Local distinctions
Zip code analysis

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
I’ve got Lance in my Pants!!!

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

13. Step 2: Targeting
Evaluating Market Segments
Developing Segment Profiles
Lance’s “Bubba”
Choosing a Targeting Strategy

14. Evaluating Market Segments
A viable target segment should satisfy these requirements:
Large enough?
Identifiable?
Measurable?
Reachable with marketing communications?
Practical: Can the marketer serve their needs?

15. Choosing a Targeting Strategy
Undifferentiated Marketing
Differentiated Marketing
Concentrated Marketing

16. 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

17. 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 & possible to identify one+ segments with distinct needs for different types of products
Lexus versus Toyota

18. 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
Specialized niche
Lamborghini

19. Step 3: Positioning Strategy
Analyze the competitors’ positions in the marketplace
Offer a product with a distinct advantage
Finalize the marketing mix
Evaluate the target market’s response to positioning so modifications can be made
Repositioning

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

21. Question
Some firms are criticized for targeting consumers. Is targeting ethical?
What about in the case of unwholesome products to vulnerable segments like the elderly or children?
Should the government regulate such marketing activities?