Transcript Solomon_ch07_basic

MARKETING
Real People, Real Choices
CHAPTER 7
Target Marketing Strategies
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
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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
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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
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Segmenting Consumer Markets
• Demographics
• Psychographics
• Geographics
• Behaviors
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Demographic Dimensions
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Age
Gender
Family structure
Income & social class
Race & ethnicity
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Age
• Children
• Teens
• Generation Y
– Who is Gen Y?
• Baby Boomers
• Elderly
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The Hispanic Market Segment
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Brand loyalty
Highly concentrated by national origin
Youthful (median age is 23.6)
3.5 people in average household
Receptive to relationship building
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Psychographics
• Segments markets in terms of shared
attitudes, interests, & opinions
• Segments include demographic as well
as includes richer descriptions
• VALS example
– Achievers
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Geographics
• Regional distinctions
– Heart disease density
• Local distinctions
– Zip code analysis
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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!!!
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Segmenting Industrial Markets
• Organizational demographics
– firm size
– number of facilities
– domestic or multinational
– type of business
– production technology utilized
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Step 2: Targeting
• Evaluating Market Segments
• Developing Segment Profiles
– Lance’s “Bubba”
• Choosing a Targeting Strategy
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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?
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Choosing a Targeting Strategy
• Undifferentiated Marketing
• Differentiated Marketing
• Concentrated Marketing
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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
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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
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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
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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
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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
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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?
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