CHAPTER 9 - Market Segmentation, Targeting & Positioning Market People/institutions with sufficient purchasing power, authority, and willingness to buy.
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CHAPTER 9 - Market Segmentation, Targeting & Positioning
Market
People/institutions with sufficient purchasing power, authority, and willingness to buy.
Market Segmentation
Process of dividing the total market into several homogeneous groups
MARKET CLASSIFICATIONS
1.
Consumer Products
- goods & services purchased by ultimate consumer ex. Coat 2.
Business Products
- products purchased to be used, either directly or indirectly in the production of other goods & services for resale ex. Cotton for coat
Effective Segmentation
1. Must be measurable in terms of both purchasing power & size ex. Babyboomers 2. Must be able to effectively promote to & serve a market segment 3. Must be sufficiently large to be potentially profitable 4. The number of market segments must match the firm's capabilities
How to Segment Consumer Markets
1.
Geographic Segmentation
- divide overall market by location ex. Texas population, climate 2.
Demographic Segmentation
- divide overall market by: age, sex, income level, occupation, education, household size, &/or stage in family life cycle
3.
Psychographic Segmentation
- divides population into groups that have similar psychological char., values, and lifestyles http://www.sric-bi.com/VALS/ *VALS (values, attitudes & life-styles) is a commercially available psychological segmentation system
4.
Product-Related Segmentation
- divides a population into homogeneous groups based on char of the consumer's relationship to the product
Several different forms of Product Segments 1. By the benefits that people seek when they buy a product Ex. Baking Soda 2. By usage rates for a product Ex. 80/20 Principle 3. Degree of brand loyalty that consumers feel toward an item Ex. frequent flyer programs
4 Strategies for Reaching Target Markets
1. UNDIFFERENTIATED MARKETING (AKA mass marketing) - firms that produce only 1 product or 1 product line AND market it to all customers 2. DIFFERENTIATED MARKETING - firms that produce numerous products w/ dif marketing mixes designed to satisfy smaller segments
3. CONCENTRATED MARKETING (or niche marketing) - firm may choose to focus on satisfying a smaller target market rather than attempting to market its product offerings to an entire market 4. MICROMARKETING - targeting potential customers at a very basic level (ie: by zip codes, specific occupations, lifestyles or indiv households)