Segmenting And Targeting Markets
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Segmenting and Targeting Markets
Chapter 6
Prepared by Deborah Baker Texas Christian University Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
1
Learning Objectives 1. Describe the characteristics of markets and market segments. 2. Explain the importance of market segmentation. 3. Discuss criteria for successful market segmentation.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
2
Learning Objectives (continued) 4. Describe the bases commonly used to segment consumer markets. 5. Describe the bases for segmenting business markets. 6. List the steps involved in segmenting markets.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
3
Learning Objectives (continued) 7. Discuss alternative strategies for selecting target markets. 8. Explain how and why firms implement positioning strategies and how product differentiation plays a role. 9. Discuss global market segmentation and targeting issues. Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
4
1
Learning Objective
On OnLine Line http://www.snipits.com http://www.snipits.com http://www.cartoon-cuts.com http://www.cartoon-cuts.com http://www.kidscuts.com http://www.kidscuts.com
Describe the characteristics of markets and market segments.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
5
1
Market Segmentation
Market Market
People People or or organizations organizations with with needs needs or or wants wants and and the the ability ability and and willingness willingness to to buy buy
Market Market Segment Segment
A A subgroup subgroup of of people people or or organizations organizations sharing sharing one one or or more more characteristics characteristics that that cause cause them them to to have have similar similar product product needs. needs.
The The process process of of dividing dividing aa market market Market Market into meaningful, relatively similar, into meaningful, relatively similar, Segmentation Segmentation identifiable identifiable segments segments or or groups. groups. Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
6
1
A Market is... (1)
people or organizations with
(2)
needs or wants, and with
(3)
the ability and
(4)
the willingness to buy.
A group of people that lacks any one of these characteristics is not a market. Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
7
1
The Concept of Market Segmentation
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
8
2
Learning Objective
Explain the importance of market segmentation.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
9
The Importance of Market Segmentation
2
Markets have a variety of product needs and preferences Marketers can better define customer needs Decision makers can define objectives and allocate resources more accurately Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
10
3
Learning Objective
Discuss criteria for successful market segmentation.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
11
3
Criteria for Segmentation Substantiality Substantiality
Segment Segment must must be be large large enough enough to to warrant warrant aa special special marketing marketing mix. mix.
Identifiability Identifiability Measurability Measurability
Segments Segments must must be be identifiable identifiable and and their their size size measurable. measurable.
Members Members of of targeted targeted segments segments must Accessibility must be be reachable reachable with with Accessibility marketing marketing mix. mix. Unless Unless segment segment responds responds to to aa Responsiveness marketing mix mix differently, differently, no no Responsiveness marketing separate separate treatment treatment is is needed. needed. Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
12
4
Learning Objective
Describe the bases commonly used to segment consumer markets.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
13
4
Segmentation Bases
Characteristics of individuals, groups, or organizations used to divide a total market into segments. (variables) Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
14
4
Bases for Segmentation
On OnLine Line http://www.toofaced.com http://www.toofaced.com
Geography Geography Demographics Demographics Psychographics Psychographics Benefits Benefits Sought Sought Usage Usage Rate Rate Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
15
4
Geographic Segmentation
Segmenting markets by region of the country or world, market size, market density, or climate.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
16
4
Geographic Segmentation
Region of the country or world Market size Market density Climate
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
17
4
Benefits of Regional Segmentation
New ways to generate sales in sluggish and competitive markets
Scanner data allow assessment of best selling brands in region
Regional brands appeal to local preferences
React more quickly to competition
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
18
4
Demographic Segmentation
Segmenting markets by age, gender, income, ethnic background, and family life cycle Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
19
Bases for Demographic Segmentation
4
Age Gender Income Ethnic background Family Life Cycle
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
20
4
Ethnic Background
Largest ethnic markets are: African-American Hispanic-American Asian-American Will comprise 1/3 of U.S. population by 2010 with buying power of a trillion dollars Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
21
4
Family Life Cycle
Age
Marital Status
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
Children
22
4
Family Life Cycle
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
23
4
Psychographic Segmentation
Market segmentation on the basis of personality, motives, lifestyles, and geodemographics.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
24
4 On OnLine Line http://www.marthastewart.com http://www.marthastewart.com http://www.goodhousekeeping.com http://www.goodhousekeeping.com
Bases for Psychographic Segmentation
Personality Personality Motives Motives
Psychographic Psychographic Segmentation Segmentation Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
Lifestyles Lifestyles Geodemographics Geodemographics 25
4
Taxonomy of Porsche Buyers
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
26
4
Lifestyle Segmentation
How time is spent Importance of things around them Beliefs Socioeconomic characteristics Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
27
4
Geodemographic Segmentation
On OnLine Line http://www.redenvelope.com http://www.redenvelope.com
Segmenting potential customers into neighborhood lifestyle categories. Combines geographic, demographic, and lifestyle segmentation.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
28
4
Benefit Segmentation
The process of grouping customers into market segments according to the benefits they seek from the product.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
29
4
Benefit Segmentation of the Snack-Food Market
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
30
4
Usage-Rate Segmentation
Dividing a market by the amount of product bought or consumed.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
31
4
The 80/20 Principle
A principle holding that 20 percent of all customers generate 80 percent of the demand.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
32
5
Learning Objective
Describe the bases for segmenting business markets.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
33
5
Business Marketing Segmentation
On OnLine Line http://www.homedepot.com http://www.homedepot.com
Segmentation Segmentation Bases Bases
Company Company Characteristics Characteristics
Buying Buying Processes Processes
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
Customer Customer Relationship Relationship
34
6
Learning Objective
List the steps involved in segmenting markets.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
35
6
Steps in Segmenting a Market
Select a market for study
Choose bases for segmentation
Select descriptors
Profile and analyze segments
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
Select target markets
Design, implement, maintain mkting mix
36
7
Learning Objective
Discuss alternative strategies for selecting target markets.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
37
7
Target Market A group of people or organizations for which an organization designs, implements, and maintains a marketing mix intended to meet the needs of that group, resulting in mutually satisfying exchanges. Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
38
7 On OnLine Line http://www.charlestongardens.com http://www.charlestongardens.com
Strategies for Selecting Target Markets
Undifferentiated Concentrated Strategy Strategy Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
Multisegment Strategy 39
Undifferentiated Targeting Strategy
7
Marketing approach that views the market as one big market with no individual segments and thus requires a single marketing mix.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
40
Undifferentiated Targeting Strategy
7
Advantages:
Potential savings on production and marketing costs
Disadvantages: Disadvantages
Unimaginative product offerings Company more susceptible to competition
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
41
Concentrated Targeting Strategy
7
A strategy used to select one segment of a market for targeting marketing efforts.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
42
7
Niche
One segment of a market.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
43
Concentrated Targeting Strategy
7
Advantages: Advantages
Concentration of resources Meets narrowly defined segment Small firms can compete Strong positioning
Disadvantages: Disadvantages
Segments too small, or changing Large competitors may market to niche segment
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
44
Multisegment Targeting Strategy
7
A strategy that chooses two or more well-defined market segments and develops a distinct marketing mix for each.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
45
Multisegment Targeting Strategy
7
Advantages: Advantages
Greater financial success Economies of scale
Disadvantages: Disadvantages
High costs Cannibalization
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
46
7
Costs of Multisegment Targeting
$ $ $ $ $ $ $
Product design costs Production costs Promotion costs Inventory costs Marketing research costs Management costs Cannibalization
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
47
7
Cannibalization
Situation that occurs when sales of a new product cut into sales of a firm’s existing products.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
48
8
Learning Objective
Explain how and why firms implement positioning strategies and how product differentiation plays a role.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
49
8
Positioning
Developing a specific marketing mix to influence potential customers’ overall perception of a brand, product line, or organization in general.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
50
8
Position
The place a product, brand, or group of products occupies in consumers’ minds relative to competing offerings.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
51
8
Positioning of Procter & Gamble Detergents
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
52
8
On OnLine Line http://www.pg.com http://www.pg.com
Effective Positioning
1. Assess the positions of competing products 2. Determine the dimensions of these positions 3. Choose an effective market position Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
53
8
Product Differentiation
A positioning strategy that some firms use to distinguish their products from those of competitors.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
54
8
Perceptual Mapping
A means of displaying or graphing, in two or more dimensions, the location of products, brands, or groups of products in customers’ minds.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
55
Perceptual Map and Positioning Strategy for Levi Strauss Products
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
56
8
Positioning Bases Attribute Attribute Price Price and and Quality Quality Use Use or or Application Application Product Product User User
Positioning Positioning Bases Bases
Product Product Class Class Competitor Competitor
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
57
8
Repositioning
Changing consumers’ perceptions of a brand in relation to competing brands.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
58
9
Learning Objective
Discuss global market segmentation and targeting issues.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
59
9
Global Issues
Trends Trends Global Market Standardization Target smaller, defined markets Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
60
Chapter 6
Prepared by Deborah Baker Texas Christian University Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
1
Learning Objectives 1. Describe the characteristics of markets and market segments. 2. Explain the importance of market segmentation. 3. Discuss criteria for successful market segmentation.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
2
Learning Objectives (continued) 4. Describe the bases commonly used to segment consumer markets. 5. Describe the bases for segmenting business markets. 6. List the steps involved in segmenting markets.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
3
Learning Objectives (continued) 7. Discuss alternative strategies for selecting target markets. 8. Explain how and why firms implement positioning strategies and how product differentiation plays a role. 9. Discuss global market segmentation and targeting issues. Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
4
1
Learning Objective
On OnLine Line http://www.snipits.com http://www.snipits.com http://www.cartoon-cuts.com http://www.cartoon-cuts.com http://www.kidscuts.com http://www.kidscuts.com
Describe the characteristics of markets and market segments.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
5
1
Market Segmentation
Market Market
People People or or organizations organizations with with needs needs or or wants wants and and the the ability ability and and willingness willingness to to buy buy
Market Market Segment Segment
A A subgroup subgroup of of people people or or organizations organizations sharing sharing one one or or more more characteristics characteristics that that cause cause them them to to have have similar similar product product needs. needs.
The The process process of of dividing dividing aa market market Market Market into meaningful, relatively similar, into meaningful, relatively similar, Segmentation Segmentation identifiable identifiable segments segments or or groups. groups. Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
6
1
A Market is... (1)
people or organizations with
(2)
needs or wants, and with
(3)
the ability and
(4)
the willingness to buy.
A group of people that lacks any one of these characteristics is not a market. Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
7
1
The Concept of Market Segmentation
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
8
2
Learning Objective
Explain the importance of market segmentation.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
9
The Importance of Market Segmentation
2
Markets have a variety of product needs and preferences Marketers can better define customer needs Decision makers can define objectives and allocate resources more accurately Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
10
3
Learning Objective
Discuss criteria for successful market segmentation.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
11
3
Criteria for Segmentation Substantiality Substantiality
Segment Segment must must be be large large enough enough to to warrant warrant aa special special marketing marketing mix. mix.
Identifiability Identifiability Measurability Measurability
Segments Segments must must be be identifiable identifiable and and their their size size measurable. measurable.
Members Members of of targeted targeted segments segments must Accessibility must be be reachable reachable with with Accessibility marketing marketing mix. mix. Unless Unless segment segment responds responds to to aa Responsiveness marketing mix mix differently, differently, no no Responsiveness marketing separate separate treatment treatment is is needed. needed. Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
12
4
Learning Objective
Describe the bases commonly used to segment consumer markets.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
13
4
Segmentation Bases
Characteristics of individuals, groups, or organizations used to divide a total market into segments. (variables) Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
14
4
Bases for Segmentation
On OnLine Line http://www.toofaced.com http://www.toofaced.com
Geography Geography Demographics Demographics Psychographics Psychographics Benefits Benefits Sought Sought Usage Usage Rate Rate Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
15
4
Geographic Segmentation
Segmenting markets by region of the country or world, market size, market density, or climate.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
16
4
Geographic Segmentation
Region of the country or world Market size Market density Climate
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
17
4
Benefits of Regional Segmentation
New ways to generate sales in sluggish and competitive markets
Scanner data allow assessment of best selling brands in region
Regional brands appeal to local preferences
React more quickly to competition
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
18
4
Demographic Segmentation
Segmenting markets by age, gender, income, ethnic background, and family life cycle Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
19
Bases for Demographic Segmentation
4
Age Gender Income Ethnic background Family Life Cycle
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
20
4
Ethnic Background
Largest ethnic markets are: African-American Hispanic-American Asian-American Will comprise 1/3 of U.S. population by 2010 with buying power of a trillion dollars Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
21
4
Family Life Cycle
Age
Marital Status
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
Children
22
4
Family Life Cycle
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
23
4
Psychographic Segmentation
Market segmentation on the basis of personality, motives, lifestyles, and geodemographics.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
24
4 On OnLine Line http://www.marthastewart.com http://www.marthastewart.com http://www.goodhousekeeping.com http://www.goodhousekeeping.com
Bases for Psychographic Segmentation
Personality Personality Motives Motives
Psychographic Psychographic Segmentation Segmentation Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
Lifestyles Lifestyles Geodemographics Geodemographics 25
4
Taxonomy of Porsche Buyers
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
26
4
Lifestyle Segmentation
How time is spent Importance of things around them Beliefs Socioeconomic characteristics Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
27
4
Geodemographic Segmentation
On OnLine Line http://www.redenvelope.com http://www.redenvelope.com
Segmenting potential customers into neighborhood lifestyle categories. Combines geographic, demographic, and lifestyle segmentation.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
28
4
Benefit Segmentation
The process of grouping customers into market segments according to the benefits they seek from the product.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
29
4
Benefit Segmentation of the Snack-Food Market
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
30
4
Usage-Rate Segmentation
Dividing a market by the amount of product bought or consumed.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
31
4
The 80/20 Principle
A principle holding that 20 percent of all customers generate 80 percent of the demand.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
32
5
Learning Objective
Describe the bases for segmenting business markets.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
33
5
Business Marketing Segmentation
On OnLine Line http://www.homedepot.com http://www.homedepot.com
Segmentation Segmentation Bases Bases
Company Company Characteristics Characteristics
Buying Buying Processes Processes
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
Customer Customer Relationship Relationship
34
6
Learning Objective
List the steps involved in segmenting markets.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
35
6
Steps in Segmenting a Market
Select a market for study
Choose bases for segmentation
Select descriptors
Profile and analyze segments
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
Select target markets
Design, implement, maintain mkting mix
36
7
Learning Objective
Discuss alternative strategies for selecting target markets.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
37
7
Target Market A group of people or organizations for which an organization designs, implements, and maintains a marketing mix intended to meet the needs of that group, resulting in mutually satisfying exchanges. Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
38
7 On OnLine Line http://www.charlestongardens.com http://www.charlestongardens.com
Strategies for Selecting Target Markets
Undifferentiated Concentrated Strategy Strategy Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
Multisegment Strategy 39
Undifferentiated Targeting Strategy
7
Marketing approach that views the market as one big market with no individual segments and thus requires a single marketing mix.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
40
Undifferentiated Targeting Strategy
7
Advantages:
Potential savings on production and marketing costs
Disadvantages: Disadvantages
Unimaginative product offerings Company more susceptible to competition
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
41
Concentrated Targeting Strategy
7
A strategy used to select one segment of a market for targeting marketing efforts.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
42
7
Niche
One segment of a market.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
43
Concentrated Targeting Strategy
7
Advantages: Advantages
Concentration of resources Meets narrowly defined segment Small firms can compete Strong positioning
Disadvantages: Disadvantages
Segments too small, or changing Large competitors may market to niche segment
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
44
Multisegment Targeting Strategy
7
A strategy that chooses two or more well-defined market segments and develops a distinct marketing mix for each.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
45
Multisegment Targeting Strategy
7
Advantages: Advantages
Greater financial success Economies of scale
Disadvantages: Disadvantages
High costs Cannibalization
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
46
7
Costs of Multisegment Targeting
$ $ $ $ $ $ $
Product design costs Production costs Promotion costs Inventory costs Marketing research costs Management costs Cannibalization
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
47
7
Cannibalization
Situation that occurs when sales of a new product cut into sales of a firm’s existing products.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
48
8
Learning Objective
Explain how and why firms implement positioning strategies and how product differentiation plays a role.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
49
8
Positioning
Developing a specific marketing mix to influence potential customers’ overall perception of a brand, product line, or organization in general.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
50
8
Position
The place a product, brand, or group of products occupies in consumers’ minds relative to competing offerings.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
51
8
Positioning of Procter & Gamble Detergents
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
52
8
On OnLine Line http://www.pg.com http://www.pg.com
Effective Positioning
1. Assess the positions of competing products 2. Determine the dimensions of these positions 3. Choose an effective market position Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
53
8
Product Differentiation
A positioning strategy that some firms use to distinguish their products from those of competitors.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
54
8
Perceptual Mapping
A means of displaying or graphing, in two or more dimensions, the location of products, brands, or groups of products in customers’ minds.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
55
Perceptual Map and Positioning Strategy for Levi Strauss Products
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
56
8
Positioning Bases Attribute Attribute Price Price and and Quality Quality Use Use or or Application Application Product Product User User
Positioning Positioning Bases Bases
Product Product Class Class Competitor Competitor
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
57
8
Repositioning
Changing consumers’ perceptions of a brand in relation to competing brands.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
58
9
Learning Objective
Discuss global market segmentation and targeting issues.
Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
59
9
Global Issues
Trends Trends Global Market Standardization Target smaller, defined markets Chapter 6 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning
60
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