Steps in the Target Marketing Process

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

Segmenting Consumer Markets

• Demographics

• Psychographics

• Behavior

Demographic Dimensions

• Age

• Gender

• Family structure

• Income and social class

• Race and ethnicity

• Geography

Psychographics

• Psychographic segments market in terms of shared attitudes, interests, and opinions

Behavioral

• 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

Targeting

• Evaluating Market Segments

• Developing Segment Profiles

• Choosing a Targeting Strategy

Targeting

This brandtargets consumersby benefits sought -the target marketwants a comfortable walking shoe.

Evaluating Market Segments

• A viable target segment should satisfy these requirements:– Are members of the segment similar to each other

but different from other segments?– Can marketers measure the segment?– Is the segment large enough to be profitable?– Can marketing communications reach the

segment?– Can the marketer serve the segment’s needs?

Developing Segment Profiles

• A profile is a description of the typical customer in that segment

Choosing a Targeting Strategy

• Undifferentiated Marketing

• Differentiated Marketing

• Concentrated Marketing

• Customized Marketing

Undifferentiated Marketing

• Appeals to a broad spectrum of people

• Efficient due to economies of scale

• Effective when most consumers have similar needs

• Example: Reliance Trends

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 and it is possible to identify one or more segments with distinct needs for different types of products

• Example: L’Oreal (Elseve, L’Oreal, Lancome)

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

Customized Marketing

• Segments are so precisely defined that products are offered to exactly meet the needs of each individual– Example: Levi’s Original Spin (custom) jeans, hair

stylists

• Mass customization is a related approach in which a company modifies a basic good to meet the needs of an individual– Example: Gateway computers, Proctor & Gamble’s

products at Reflect.com

Levi’s Custom Jeans

Custom Beauty Solutions

Positioning

• Developing a marketing strategy aimed at influencing how a particular market segment perceives a product in comparison to the competition

Developing a Positioning Statement

• Analyze the competitors’ positions in the marketplace

• Offer a product with a competitive advantage

• Finalize the marketing mix

• Evaluate the target market’s response so modifications to the positioning strategy can be made (repositioning)

Positioning

BC Ethic positioneditself as cool bygiving custom shirtsto popular musicgroups and then using the groups in its ads.

The Brand Personality

• A Positioning Strategy attempts to create a brand personality for a product - a distinctive image that captures its character and benefits

• How do marketers determine where their products actually stand in the minds of consumers?

– Perceptual mapping

Perceptual Map