Marketing Segmentation

substantial

enough people with money

fourth stage in market selection process

evaluate relevant market segments

mass marketing

(shot-gun approach) same marketing mix directed at all consumers. (no segmentation. WD-40)

segment marketing

(target approach) different marketing mix to one or more segments (some segmentation. P&G)

psychographic and demographics variables

VALS & VALS 2, based on values, lifestyles, and demographic data

target market

a specific group of customers on whom an organization focuses its marketing efforts

benefit segmentation

based on real or perceived benefits that a product or service offers a consumer

a market segment

consists of individuals, groups, or organizations with one or more similar characteristics that cause them to have relatively similar product needs

measurable

demographic/psychographic data

second stage in market selection process

determine which segmentation variables to use

third stage in market selection process

develop market segment profiles

first stage in market selection process

identifying the appropriate targeting strategy

market segmentation

is the process of dividing a total market into homogeneous subgroups, or segments, consisting of people or organizations with relatively similar product needs

personality characteristics

marketers appeal to positive/favorable personal characteristics to influence the purchase decision

lifestyles

marketers segment markets according to how individuals choose to spend their time in various activities, their income, their interests and opinions

motives

marketers use individuals' differeing purchase motives to segment a product market

geodemographic segmentation

marketing segmentation that clusters people in zip code areas and smaller neighborhood units based on lifestyle and demographic information (PRIZM and MicroVision)

mass marketers rarely practice mass marketing

mass marketers do target almost everyone, but they do not do it with one marketing mix they develop unique marketing mixes and strategies for each major target market

mass marketers do not often practice

mass marketing today, they practice differentiated marketing, they might slightly change the product to appeal to different segments ( they change price, place, and promotion)

select the right position

must be valued by the target market, distinctive-something competitors do not have, superior/preemptive-something competitors cannot replicate easily, communicable- must be visible or able to convey

how many mm for mass marketing

one mm for all

how many mm for segment marketing

one or more mm targeted to one or more segments

how many mm for niche marketing

one or more mm targeted to one or more sub-segments

how many mm for micro marketing

one or more mm targeted to specific individuals or communities

product positioning

placing the product in the mind of the consumer

differentiation

positioning on physical characteristics; pertains to objective aspects of the product

targeting strategies

the classic mass marketing, all things to all people approach, ignore segments, one mm, rarely used today

national firms may target regionally

product may mean different things in different parts of the country (McDonald's) coke or pop or soda and is it a breakfast drink

identifying the brand's strong points in relation to the competition

product, service, image, place, and personnel differentiation

differentiation variables

products (features, performance, durability, reliability, serviceability)

accessible

reachable (language barriers, etc.)

fifth stage in market selection process

select specific target markets

How many differences to promote

single benefit positioning usually best (best quality, lowest price, best value, and most reliable), easy to promote and remember, helps to gain positioning intensity

criteria for successful segmentation

substantial, measurable, accessible, responsive

Basis of Differentiation

tangible thing (product features, location), intangible concept (reputation, a cause, an ideal, etc.), Limited only by managerial creativity

differentiated strategy

the firm decides to target several separate segments and designs separate marketing strategies and marketing mixes for each, most companies offer a good, better, best version of a product for different target markets, typically, for most firms, this means you go for a small share of the larger, total aggregate market (one or two mm for one or two segments out of maybe 6 or 7)

concentrated marketing

the firm goes for a large share of a single segments, can be niched or larger (GM division-trucks only)

the purpose of market segmentation

to enable a marketer to design a marketing mix that more precisely matches the needs of customers in the selected market segments

demographic variables

use characteristics of the population, perhaps the most widely used and most widely available, objective, often a proxy for harder to obtain psychographics (young adults interested in housing, 50 year old and interest in retirement funds)

you can target the same product to different segments

using different promotion, pricing, and distribution strategy

behavioral

very straightforward-target your users,

responsive

will consumers buy what we offer in the segment?