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    Gilbert A. Churchill, Jr. J. Paul Peter

    Chapter 8Market Segmentation

    Marketing

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    Basic DefinitionsSlide8-1

    Approach

    Market

    Market

    Segmentation

    Definition

    Target

    Market

    Individuals or organizations with the desire and

    ability to buy goods and services

    The particular market segment that the organization

    selects to serve.

    The process of dividing a market into groups of

    potential buyers who have similar needs andwants, value perceptions, or purchasing behavior

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    Approaches to Serving MarketsTable8.1

    Slide8-2

    Approach

    Mass Marketing A single marketing mix forthe entire market

    SegmentMarketing

    Description Examples

    IndividualMarketing

    Phone service, WEB pages

    Niche Marketing

    A single marketing mix for

    one segment of the market

    Women's Workout World (exercise

    facilities for women); American

    Association for Retired Persons

    (lobbying and membership servicesfor people over 50)

    McDonalds (Happy Meals for

    young children, Big Macs for

    Teens, Arch Deluxe for adults);

    Toshiba copiers (several sizes and

    features to meet different levels of

    business needs)

    Personalized amenities for repeat

    guests at Ritz-Carlton hotels;

    management consulting services

    tailored to an organizations needs

    A marketing mix

    customized for an

    individual or organization

    Differentiated Marketing

    Separate marketing mixes

    for two or more segmentsof the market

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    Market Segmentationused to develop a competitive advantage

    Market Potential - the totalpurchases that buyers in asegment will likely make during aspecified period of time, given aspecified level of marketing activity

    Measurability - be ableto measure its size andcharacteristics

    Responsiveness -respond differently to

    some aspect of the 4Pthan other se ments

    Accessibility - be ableto reach members of targetsegment with customized

    marketing mixes

    Criteria forSuccessful

    MarketSegmentation

    Slide8-3

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    P & G Segmentation - Detergent Market53% market share of the $3.2 billion market

    TIDE - Tidesin, dirt out

    CHEER - all

    temperature -Cheer

    BOLD- cleans,soften,and

    controls static

    GAIN -freshens like

    sunshine

    ERA - built-in stain

    remover

    DASH -attack

    tough dirt

    OXYDOL -makes clothes

    bright

    SOLO - liquiddetergent with

    fabric softener

    DREFT - a

    clean you cantrust

    IVORY SNOW -mild, gentle soapfor baby clothes

    ARIEL - toughcleaner

    Slide8-4

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    Mass/Undifferentiated MarketingSlide8-5

    Price

    PromotionPlacement

    Product

    The Market

    Everyone

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    Niche MarketingSlide8-6

    Price

    PromotionPlacement

    Product

    The Market

    MarketSegment

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    Differentiated MarketingSlide8-7

    Price

    PromotionPlacement

    Product

    The Market

    Market

    Segment

    MarketSegment

    Price

    PromotionPlacement

    Product

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    Individual MarketingSlide8-8

    Price

    PromotionPlacement

    Product

    The Market

    CustomerPrice

    PromotionPlacement

    Product

    Price

    PromotionPlacement

    Product

    Price

    Promotion

    Placement

    Product

    Customer

    Customer

    Customer

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    Some Bases for SegmentingConsumer Markets

    Slide8-9

    Demographic

    Segmentation

    Geographic

    PsychologicalBenefit

    Behavior SouthwestAirlines

    Frito-Lay

    SnacksColgate

    Toothpaste

    CampbellSoup

    LevisDockers

    Table8.2

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    VALS2 Lifestyle Categories -Consumer Markets

    Slide8-10

    Figure8.2

    Resources

    Abundant

    Self-OrientationPrincipalOriented

    StatusOriented

    ActionOriented

    Minimal

    Fulfilleds Achievers Experiencers

    Believers Strivers Makers

    Strugglers

    Actualizers

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    Some Bases for SegmentingOrganizational Markets

    Slide8-11

    Segmentation

    Geographic

    CustomerType

    OrganizationalBuyer

    BehaviorFlowers IndustriesBaked Goods

    IntelComputer Chips

    Apple ComputerNewton PocketComputer

    Table8.3

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    The Process of Market Segmentation

    Slide8-12

    Figure8.5

    Analyze Customer

    Product Relationship

    Investigate

    Segmentation Bases

    Develop Product

    Positioning

    Select Segmentation

    Strategy

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    Product Position

    Positioning Bases

    AttributeBMW - performance

    Price and QualityDillards VS KMart

    Use or ApplicationGatorate

    Product UserJ&J Baby Shampoo

    Product ClassParkay, Caress

    Competitor

    VISA VS AMEX

    The perception of the product

    relative to competing

    products in the minds of

    potential buyers.

    Slide8-13

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    Sample Positioning Map: AutomobilesSlide8-14

    Figure8.6

    Traditional Sporty

    Functional

    Luxurious

    Lexus

    BMW

    Pontiac

    Mercedes

    Cadillac

    Lincoln

    ChryslerBuickOldsmobile

    Porsche

    Chevrolet

    Nissan

    Toyota

    SaturnVW

    Ford

    Dodge

    Plymouth

    Mercury