Transcript Market Segmentation and Market Targeting

Market Segmentation and
Market Targeting
Introduction
Instructional Goals:
 To understand what it means to
"segment" a market
 The basic steps in segmenting a market
 How you know if you have done a good
job of segmentation
 How to evaluate and select segments for
targeting of marketing programs
Marketers can target their
products to customers in four
distinct ways
•Mass marketing
•Segment or product-variety
marketing
•Target (both niche and local)
marketing
•Individual marketing
Mass Marketing
Mass marketing aims to attract
all kinds of buyers by
producing and distributing the
one best product at the lowest
possible price
Segment Marketing
Segment or product-variety
marketing aims to serve
large identifiable groups by
offering a limited array of
good products at a variety
of prices
Target Marketing
Target (both niche and local)
marketing aims to please
identifiable clusters of customers
by providing products that are
carefully tailored to match group
means and tastes
Individual Marketing
Individual or marketing aims to
satisfy individual customers
by providing products that are
precisely tailored to match
individual means and tastes
Target marketing is where
we are today
The key steps in target marketing are
•Market segmentation
•Market evaluation
•Product differentiation and
positioning.
Market segmentation
Market segmentation means
dividing mass markets into
distinct groups of buyers with
relatively homogeneous tastes,
preferences, or behaviors that
distinguish them from the rest of
the market.
Market Evaluation
Market evaluation = assessing the sales
potential of each segment and selecting
segments most suitable for exploitation.
Sales potential is a function of the number of
people in the segment, their disposable
incomes, and their willingness to pay for
product attributes -- given the organization’s
ability to serve them.
Indicators: size, growth rate, price sensitivity,
current usage in the product category, etc.
Market Positioning
A product's position is defined by how
consumers view it on important attributes -the "rank" a product holds in the consumer’s
mind
Marketers can position products by users, by
usages, by price and/or quality, according to
product attributes or benefits received, against
a single competitor, against many competitors,
or against an entire product category.
Video Case 1: Patagonia
• How does Patagonia exemplify the marketing
concept? The societal marketing concept?
• What type of marketing
Patagonia pursued?
strategy
has
• How has Patagonia responded to the forces in
the macro-environment?
• Are the critics right? Or will Patagonia’s
actions help reduce consumption?
Buying Power Index: Dishwasher
Manufacturer
(a)
(b)
(c)
(d)
(e)
Metropolitan
area covered .
Number
of
Houshol
ds
No.
earning
$25,000+
Appliance
Sales
No. aged Sum of Percent
25-49
Factors
Boston
1,366.4
449.5
$548.0
1,287.5
3,651.4
70.4
Springfield
204.0
51.8
66.7
182.4
504.9
9.7
Worcester
222.2
63.8
105.5
200.5
592.0
11.4
New Bedford
170.2
33.9
83.1
148.3
435.5
8.4
5,183.8
99.9°
Totals
(f)
(g)
Index Numbers :
• The number of households and appliance sales were
given in the Survey of Buying Power data.
• The number earning $25,000+ a year was given in
percentage form and multiplied by the number of
households in each market.
• The number aged 25-34 and 35-49 were given in
percentage form. These were added for each market
and multiplied by population.
• Columns b, c, d, and e were added across to get a
sum of factors for each market.
• The sums of factors were added downward.
• Each sum of factor was divided by the total to get an
index number (or percent).