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Chapter 9

Chapter 9. Identifying Market Segments and Selecting Target Markets. PowerPoint by Karen E. James Louisiana State University - Shreveport. Objectives. Learn how companies identify the segments that make up a market.

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Chapter 9

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  1. Chapter 9 Identifying Market Segments and Selecting Target Markets PowerPoint by Karen E. James Louisiana State University - Shreveport To accompany A Framework for Marketing Management, 2nd Edition

  2. Objectives • Learn how companies identify the segments that make up a market. • Understand the criteria companies use to choose the most attractive market segments. To accompany A Framework for Marketing Management, 2nd Edition

  3. Target Marketing • Target marketing requires marketers to take three major steps: • Market segmentation: Identifying and profiling distinct groups of buyers who differ in their needs and preferences. • Market targeting: Selecting one or more market segments to enter. • Market positioning: Establishing and communicating the key distinctive benefit(s) of the company’s market offering to each target. To accompany A Framework for Marketing Management, 2nd Edition

  4. Using Market Segmentation • Mass marketing is losing popularity • Micromarketing can be undertaken at four levels: • Segment marketing • Niche marketing • Local marketing • Individual marketing To accompany A Framework for Marketing Management, 2nd Edition

  5. Using Market Segmentation • Three patterns of preference segments are typically identified: • Homogeneous preferences • Diffused preferences • Clustered preferences To accompany A Framework for Marketing Management, 2nd Edition

  6. Needs-based segmentation Segment identification Segment attractiveness Segment profitability Segment positioning Segment “acid test” Using Market Segmentation Needs-based Segmentation Process • Marketing-mix strategy To accompany A Framework for Marketing Management, 2nd Edition

  7. Using Market Segmentation • Useful market segments share certain characteristics: • Measurable • Substantial • Accessible • Differentiable • Actionable To accompany A Framework for Marketing Management, 2nd Edition

  8. Bases for Segmentation Geographic Demographic Psychographic Behavioral Nation or country State or region City or metro size Density Climate Segmenting Consumer Markets To accompany A Framework for Marketing Management, 2nd Edition

  9. Bases for Segmentation Geographic Demographic Psychographic Behavioral Age, race, gender Income, education Family size Family life cycle Occupation Religion, nationality Generation Social class Segmenting Consumer Markets To accompany A Framework for Marketing Management, 2nd Edition

  10. Bases for Segmentation Geographic Demographic Psychographic Behavioral Lifestyle Activities Interests Opinions Personality Core values Segmenting Consumer Markets To accompany A Framework for Marketing Management, 2nd Edition

  11. Bases for Segmentation Geographic Demographic Psychographic Behavioral Occasions Benefits User status Usage rate Loyalty status Buyer-readiness Attitude Segmenting Consumer Markets To accompany A Framework for Marketing Management, 2nd Edition

  12. Segmenting Consumer Markets • Multi-attribute segmentation via geoclustering combines multiple variables to identify smaller, better-defined target groups • PRIZM Geoclustering system uses demographic, geographic, lifestyle, and behavioral characteristics To accompany A Framework for Marketing Management, 2nd Edition

  13. Operating variables Purchasing approaches Situational factors Personal characteristics Segmenting Business Markets Bases for Segmentation • Demographic variables To accompany A Framework for Marketing Management, 2nd Edition

  14. Segmenting Business Markets • Rackman and Vincentis proposed a segmentation scheme that classifies business buyers into three groups: • Price-oriented customers: best served via transactional selling • Solution-oriented customers: best served by means of consultative selling • Strategic-value customers: best served by means of enterprise selling To accompany A Framework for Marketing Management, 2nd Edition

  15. Market Targeting Strategies • Evaluating and selecting market segments requires assessing the segment’s overall attractiveness in light of company’s objectives and resources. • Five patterns of target market selection can then be considered. To accompany A Framework for Marketing Management, 2nd Edition

  16. Single-segment concentration Selective specialization Product specialization Market specialization Market Targeting Strategies Patterns of Target Market Selection • Full market coverage To accompany A Framework for Marketing Management, 2nd Edition

  17. Market Targeting Strategies • Targeting multiple segments may result in cost economies • Supersegment targeting may be appropriate • Blocked markets often require megamarketing countermeasures • Be aware of ethical concerns To accompany A Framework for Marketing Management, 2nd Edition

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