CHAPTER 7 Target Marketing Strategies

1. M A R K E T I N G Real People, Real Choices CHAPTER 7Target Marketing Strategies

2. Chapter Objectives • Understand the need for market segmentation • Know the different dimensions marketers use to segment consumer & industrial markets • Explain how marketers evaluate & select potential market segments

3. Chapter Objectives • Explain how marketers develop a targeting strategy • Understand how a firm develops & implements a positioning strategy • Know how marketers practice customer relationship management to increase long-term success and profits

4. Step 1: 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 • Can segment a variety of ways

5. Segmenting Consumer Markets • Demographics • Psychographics • Geographics • Behaviors

6. Demographic Dimensions • Age • Gender • Family structure • Income & social class • Race & ethnicity

7. Age • Children • Teens • Generation Y • Who is Gen Y? • Baby Boomers • Elderly

8. The Hispanic Market Segment • Brand loyalty • Highly concentrated by national origin • Youthful (median age is 23.6) • 3.5 people in average household • Receptive to relationship building

9. Psychographics • Segments markets in terms of shared attitudes, interests, & opinions • Segments include demographic as well as includes richer descriptions • VALS example • Achievers

10. Geographics • Regional distinctions • Heart disease density • Local distinctions • Zip code analysis

11. Segmenting by Behavior • 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 • I’ve got Lance in my Pants!!!

12. Segmenting Industrial Markets • Organizational demographics • firm size • number of facilities • domestic or multinational • type of business • production technology utilized

13. Step 2: Targeting • Evaluating Market Segments • Developing Segment Profiles • Lance’s “Bubba” • Choosing a Targeting Strategy

14. Evaluating Market Segments • A viable target segment should satisfy these requirements: • Large enough? • Identifiable? • Measurable? • Reachable with marketing communications? • Practical: Can the marketer serve their needs?

15. Choosing a Targeting Strategy • Undifferentiated Marketing • Differentiated Marketing • Concentrated Marketing

16. Undifferentiated Marketing • Appeals to a broad spectrum of people • Efficient due to economies of scale • Effective when most consumers have similar needs • Example: Wal-Mart

17. 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 & possible to identify one+ segments with distinct needs for different types of products • Lexus versus Toyota

18. 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 • Specialized niche • Lamborghini

19. Step 3: Positioning Strategy • Analyze the competitors’ positions in the marketplace • Offer a product with a distinct advantage • Finalize the marketing mix • Evaluate the target market’s response to positioning so modifications can be made • Repositioning

20. The Brand Personality • A positioning strategy attempts to create a brand personality for a product • A distinctive image that captures its character & benefits • How do marketers determine where their products actually stand in the minds of consumers • Perceptual mapping

21. Question • Some firms are criticized for targeting consumers. Is targeting ethical? • What about in the case of unwholesome products to vulnerable segments like the elderly or children? • Should the government regulate such marketing activities?