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TARGET MARKETS: SEGMENTATION,

EVALUATION, AND POSITIONING

Chapter 6

Chris Schrage

TYPES OF MARKETS

CONSUMER MARKETCONSUMER MARKETCONSUMER MARKETCONSUMER MARKETCONSUMER MARKETCONSUMER MARKETCONSUMER MARKETCONSUMER MARKET BUSINESS MARKETBUSINESS MARKETBUSINESS MARKETBUSINESS MARKETBUSINESS MARKETBUSINESS MARKETBUSINESS MARKETBUSINESS MARKET

� End user of the finished End user of the finished End user of the finished End user of the finished

product or serviceproduct or serviceproduct or serviceproduct or service

� Individuals or groupsIndividuals or groupsIndividuals or groupsIndividuals or groups

� Raw materials for productionRaw materials for productionRaw materials for productionRaw materials for production

� Equipment or tools for the Equipment or tools for the Equipment or tools for the Equipment or tools for the production processproduction processproduction processproduction process

� Items for support processes of Items for support processes of Items for support processes of Items for support processes of the businessthe businessthe businessthe business

� Alternative namesAlternative namesAlternative namesAlternative names

� B2BB2BB2BB2B

� IndustrialIndustrialIndustrialIndustrial

� OrganizationalOrganizationalOrganizationalOrganizational

� Producer, reseller, government, Producer, reseller, government, Producer, reseller, government, Producer, reseller, government, NGO, institutionalNGO, institutionalNGO, institutionalNGO, institutional

DETERMINING THE TARGET MARKET

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IDENTIFYING THE STRATEGY

DETERMINING SEGMENTATION CRITERIA

VALS

� ResourcesResourcesResourcesResources� Energy, self-confidence, intellectualism, novelty seeking, innovativeness, impulsiveness, leadership, and vanity play a critical role. Age, income and education are also resources

� Primary Motivation: Ideals, Primary Motivation: Ideals, Primary Motivation: Ideals, Primary Motivation: Ideals, Achievement, and SelfAchievement, and SelfAchievement, and SelfAchievement, and Self----ExpressionExpressionExpressionExpression� Consumers motivated by ideals are guided by knowledge and principles.

� Consumers motivated by achievement look for products and services that demonstrate success.

� Consumers motivated by self-expression desire social or physical activity, variety, and risk.

2009–2011 by Strategic Business Insights

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BUSINESS MARKET SEGMENTATION

PROFILE MARKET SEGMENTS

� Similarities of customer wants and needs with

in a segment

� How does the company’s strengths provide

value to the segments?

�Which segments are most attractive to service?

�Which segments are not profitable or feasible

to the company?

EVALUATE FOR MOST PROMISING SEGMENTS

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SELECT MARKETS WITH MOST POTENTIAL

� Choose segments where company’s

competitive advantage makes sense

� Look at future potential not just today’s

situation

� Is the market long-lasting or short-lived?

POSITIONING AND REPOSITIONING

� Attributes/features

� Competition

� Price

� Quality

� Benefits

POSITION THESE ITEMS

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PERCEPTUAL MAPPING-BEVERAGES

ExpensiveExpensiveExpensiveExpensiveInexpensiveInexpensiveInexpensiveInexpensive

High qualityHigh qualityHigh qualityHigh quality

Low qualityLow qualityLow qualityLow quality

FORECASTINGFORECASTINGFORECASTINGFORECASTING

One thing to rememberOne thing to rememberOne thing to rememberOne thing to rememberOne thing to rememberOne thing to rememberOne thing to rememberOne thing to remember-------- forecasting is ALWAYs inaccurate. The best you can forecasting is ALWAYs inaccurate. The best you can forecasting is ALWAYs inaccurate. The best you can forecasting is ALWAYs inaccurate. The best you can forecasting is ALWAYs inaccurate. The best you can forecasting is ALWAYs inaccurate. The best you can forecasting is ALWAYs inaccurate. The best you can forecasting is ALWAYs inaccurate. The best you can

hope for is to be close most of the time. hope for is to be close most of the time. hope for is to be close most of the time. hope for is to be close most of the time. hope for is to be close most of the time. hope for is to be close most of the time. hope for is to be close most of the time. hope for is to be close most of the time.

TYPES OF FORECASTING METHODS

Executive Executive Executive Executive Executive Executive Executive Executive JudgmentJudgmentJudgmentJudgmentJudgmentJudgmentJudgmentJudgment

SurveysSurveysSurveysSurveysSurveysSurveysSurveysSurveysTime Time Time Time Time Time Time Time series series series series series series series series analysisanalysisanalysisanalysisanalysisanalysisanalysisanalysis

Regression Regression Regression Regression Regression Regression Regression Regression analysisanalysisanalysisanalysisanalysisanalysisanalysisanalysis

Market Market Market Market Market Market Market Market teststeststeststeststeststeststeststests

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MULTIPLE FORECASTING METHODS

� Short-range vs. long-range

� Diverse products

� Verification