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Segmenting and Targeting

Carving Up the Market . Trying to reach “everyone” with a marketing message costs money and sends unwanted messages to people who aren’t customers or prospects. It makes more sense to narrow the audience to people who are most likely to buy the brand.

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Segmenting and Targeting

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  1. Carving Up the Market Trying to reach “everyone” with a marketing message costs money and sends unwanted messages to people who aren’t customers or prospects. It makes more sense to narrow the audience to people who are most likely to buy the brand. Segmenting is used to identify these groups of people. Targeting is the planning strategy for reaching and communicating with them. Segmenting and Targeting

  2. Segmenting is grouping customers or prospects according to common characteristics, needs, wants, and/or desires. Targeting is analyzing, evaluating, and prioritizing those market segments deemed most profitable to pursue. Reasons forSegmenting and Targeting

  3. Moving Away from Mass Marketing Mass marketing attempts to sell the same thing to everyone. Segmenting became more important as marketing moved away from mass marketing. Niche markets are defined by very distinct commonalities among their members. One-to-one marketing means customizing products and marketing communication for an individual person or company according to individual needs.

  4. Figure 7-2, p.240 Screening Criteria and Size of Segment

  5. Figure 7-3, p.242 Steps in Segmenting and Targeting

  6. Current Customers Segmentation starts by identifying and profiling current customers. Three main principles behind this: • It is cheaper to sell to already existing customers. • Some customers are more profitable than others. • Common characteristics of the high-profit segment may be used to identify high-probability prospects.

  7. Customer Profile Variables

  8. Types of Market Segmentation • Behavioral segments • Benefit segments • Demographic segments • Ethnic segments • Geodemographic segments • Psychographic segments • Lifestyle segments • Life stage segments • Relationship Segments • Adopter Segments

  9. How Targeting Works • Targeting is done by using profile characteristics of segments to draw boundaries around a particular group of customer or prospects that are projected to respond well to a brand and its marketing communication. • Then, marketers estimate the group’s size. • The next step is to prioritize the segments. • A company then develops message strategies and media plans for select segments.

  10. Criticisms of marketing and marketing communication arise from controversial targeting decisions related to special groups. Many people feel that children should not be a targeted for certain kinds of products. Minority groups feel they are bombarded with “sin product” ads. Ethics of Targeting

  11. Balancing Acquisition and Retention Most companies seldom have a proper balance of targeting current customers (for retention) and prospective customers (for acquisition). Many marketing programs have not been as cost effective as they could be because they are based on the traditional methods of focusing on transactions rather than relationships. Strategic segmenting and targeting allow a company to use marketing communication tools more efficiently.

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