MARKETING MANAGEMENT12th edition
8 Identifying Market
Segments and Targets
Kotler Keller
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Chapter Questions
• What are the different levels of market segmentation?
• How can a company divide a market into segments?
• How should a company choose the most attractive target markets?
• What are the requirements for effective segmentation?
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Effective Targeting Requires…
• Identify and profile distinct groups of buyers who differ in their needs and preferences.
• Select one or more market segments to enter.
• Establish and communicate the distinctive benefits of the market offering.
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Four levels of Micromarketing
Segments
Local areas Individuals
Niches
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Segment Marketing
Targeting a group of customerswho share a similar set of
needs and wants.
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Flexible Marketing Offerings
• Naked solution– Product and service
elements that all segment members value
• Discretionary options– Some segment
members value– Options may carry
additional charges
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Figure 8.1 Basic Market Preference Patterns
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Niche Marketers
Enterprise Rent-a-Cartargets the insurance-replacement market
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Niche Marketers: Tom’s
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The Experience Economy
Commodity
Goods
Services
Experience
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Customerization
Combines operationally drivenmass customization with customizedmarketing in a way that empowers
consumers to design theproduct and service offering
of their choice.
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Figure 8.2 Examples of Market Customization
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Segmenting Consumer Markets
Geographic
Demographic
Psychographic
Behavioral
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Demographic Segmentation
Age and Life Cycle
Life Stage
Gender
Income
Generation
Social Class
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Toyota Scion targets Gen Y consumers
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Figure 8.3 Profiling American Generations
• GI Generation– 1901-1924
• Silent Generation– 1925-1945
• Baby Boomers– 1946-1964
• Generation X– 1965-1977
• Generation Y– 1978-1994
• Millenials– 1995-2002
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Behavioral Segmentation
Decision Roles• Initiator• Influencer• Decider• Buyer• User
Behavioral Variables• Occasions• Benefits• User Status• Usage Rate• Buyer-Readiness• Loyalty Status• Attitude
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Mobil’s 5 Customer Segments
Road Warriors
Gen F
True Blues
Home Bodies
Price Shoppers
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Loyalty Status
Switchers
Shifting loyals
Split loyals
Hard-core
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The Conversion Model
Convertible Shallow Average Entrenched
Stronglyunavailable
Ambivalent AvailableWeakly
unavailable
Users Nonusers
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Figure 8.5 Behavioral Segmentation Breakdown
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Segmenting for Business Markets
Demographic
Operating Variable
Purchasing Approaches
Situational Factors
PersonalCharacteristics
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BB&T Bank’s B-to-B advertising
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Nextel
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Models of Sequential Segmentation
Stage of decision• First-time
prospects• Novices• Sophisticates
Orientation• Price-oriented• Solution-oriented• Strategic-value
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Steps in Segmentation Process
Needs-based segmentation
Segment identification
Segment attractiveness
Segment profitability
Segment positioning
Segment acid test
Marketing-MixStrategy
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Figure 8.6 Patterns of Target Market Selection
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Figure 8.6 Patterns of Target Market Selection
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Figure 8.6 Patterns of Target Market Selection
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Effective Segmentation Criteria
Measurable
Substantial
Accessible
Differentiable
Actionable
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Figure 8.7 Segment-by-Segment Invasion Plan
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Pepsi used megamarketing in India
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Marketing Debate
Is mass marketing dead?
Take a position:1. Mass marketing is dead.2. Mass marketing is still a viable wayto build a profitable brand.
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Marketing Discussion
How would you classify yourself interms of the various segmentationschemes?