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?