Chapter 7 - Identifying Market Segments and Targets
Transcript of Chapter 7 - Identifying Market Segments and Targets
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7 Identifying Market Segments
and
Targets
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Chapter Questions
What are the different levels of market segmentation?
How can a company identify the segments that make up a market?
How should a company choose the most attractive target markets?
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What is Target Marketing?
In Mass Marketing, the seller is engaged in mass production, mass distribution and mass promotion.
What is Mass Marketing?
Identifying distinct groups of buyers who differ in their needs and preferences; Selecting one or more market segments to enter; Establishing and communicating the distinctive benefits of the market offering.
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Four levels of Micromarketing
Segments
Local areas Individuals
Niches
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Segment Marketing: Flexible Marketing Offerings
Naked solution: Product and service elements that all segment members value
Discretionary options:Some segment members value options but not all
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Preference Segments
Homogeneous preferences
Diffused preferences
Clustered preferences
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What is Customerization?
Customerization combines operationally driven mass customization with customized marketing in a way that empowers consumers to design the product and service offering of their choice.
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Segmenting Consumer Markets
GeographicGeographic
DemographicDemographic
PsychographicPsychographic
BehavioralBehavioral
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Geographic Segmentation
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Nations
States
Regions
Countries
Cities
Neighborhoods
Zip codes
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Demographic Segmentation
Age
Lifecycle stage
Gender
Income
Generation
Social class
Race and Culture
Education, occupation
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Psychographic Segmentation and the VALS Framework
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The Long TailChris Anderson explains the long tail equation:
The lower the cost of distribution, the more you can economically offer without having to predict demand;
The more you can offer, the greater the chance that you will be able to tap latent demand for minority tastes; and
Aggregate enough minority taste, and you may find a new market.
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Behavioral Segmentation
Decision Roles
Initiator
Influencer
Decider
Buyer
User
Behavioral Variables
Occasions
Benefits
User Status
Usage Rate
Buyer-Readiness
Loyalty Status
Attitude
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The Brand Funnel Illustrates Variations in the Buyer-Readiness Stage
Unaware
Aware
Ever tried
Recent trial
Occasional user
Regular user
Most often used
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Behavioral Segmentation Breakdown
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Example of a Brand Funnel
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Loyalty Status
Hard-core
Split loyals
Shifting loyals
Switchers
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Segmenting Business Markets
‘Demographic’‘Demographic’
Operating VariableOperating Variable
Purchasing ApproachesPurchasing Approaches
Situational FactorsSituational Factors
PersonalCharacteristics
PersonalCharacteristics
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Effective Segmentation Criteria
Measurable
Substantial
Accessible
Differentiable
Actionable
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The Conversion Model
Convertible Shallow Average Entrenched
Stronglyunavailable
Ambivalent AvailableWeakly
unavailable
Users Nonusers
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Steps in Segmentation Process
Needs-based segmentation
Segment identification
Segment attractiveness
Segment profitability
Segment positioning
Segment acid test
Marketing-MixStrategy
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Porter’s 5 Forces Model
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Threat of Rivalry
Threat of SupplierBargaining Power
Threat of Buyer Bargaining
Power
Threat of New Entrants
Threat of Substitutes
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Patterns of Target Market Selection
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Patterns of Target Market Selection
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Patterns of Target Market Selection
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Segment-by-Segment Invasion Plan
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