Principles

of
Marketing
Market
Segmentation and
Targeting

Submitted by: Submitted to:

Bolos, Helen Kaye Ms. Michelle Guico
Degayo, Romalyn Date of submission:
Redimano, Dave October 26,2017
Market – the term “market may be defined in many ways all depending on whose
point of view is referred to.

 Economics – the mother discipline of management, which in turn gave “birth” to

marketing.
 Place – market is a place where the sellers and buyers exchange goods or
services upon an agreed price.
 Buyers – market as a group of people or organizations that buy a particular
good, service, or concept.
 Opportunity – market is any mechanism that enables buyers and sellers to
strike bargains and to transact.
Market – A market is composed of people with need to satisfy, the money to spend, the
willingness to spend and the ability to satisfy the objectives of the seller.

TYPES OF MARKET

1. According to type of Institution

 Consumer Markets. Buyers who intend to directly consume a product or
service constitute the consumer market.
 Organizational Markets. Buyers of products or services whose intention
is to produce another product or service.
 International Markets. Buyers found abroad including consumers and
organizations.
2. According to type of Form
 Primary Markets. Formed when a firm introduces a new product class
in response to latent demand or needs.
Refers to customer demand that is
unarticulated or abstract. It is w/o reference to a particular product or
service.
 Secondary Markets. Is an offshoot of the primary market and it is
formed when customers develop specific needs or preferences.

MARKET SEGMENTATION
A market segment is a sub-group of a particular market which is composed of units
with more or less similar characteristics.
Market segmentation may be defined as the process of identifying the various
segments of a company’s particular market

The Advantages of Market Segmentation

1. Segmentation forces the marketer to be aware of realities in the market
2. Segmentation provides clues in the design of products and marketing programs
that will reach the prospective customers.
3. Segmentation can help identify opportunities for new product development.
4. Segmentation can help improve the strategic allocation of marketing resources.

Segmentation Strategies

 Concentration or single segment strategy – refers to that long term

decision of the company to deal only with a particular segment of the
market.
 Multi segment strategy – calls for providing products or services to two or
more segments of the target market.
The process of Segmenting Markets
1. Identification of market segments in terms of characteristics of prospective
customers they contain.
2. Determination of whether and to what extent there are differences in the needs
or benefits sought by customers in the various segments.
3. Evaluation of the present and future attractiveness of each segment.

Bases for Market Segmentation

 Geographic Segmentation – requires dividing the market into different

geographical units like nations, regions, provinces, cities towns or barangays.
 Demographic Segmentation – refers to dividing the market into segments on the
basis of demographic variables like age, sex, family size, family life cycle,
income, occupation, education, religion, race, and nationality.
 Psychographic Segmentation – refers to the classification of buyers or
consumers by some psychological characteristics they possess in common. The
may be grouped accrdng. to social class or lifestyle.
 Behavior Segmentation – refers to the grouping of buyers in the basis of their
knowledge, attitude, use or response to a product. Buyer behavior may be
segmented accrdng. to various categories; a. Purchase Situation b. Benefits
Sought c. User Status d. Usage Rate e. Loyalty Status f. Readiness Stage and g.
Attitude toward product.

Buyers may also be grouped accrdng. to their loyalty to particular brands.

1. Those who buy only one brand of product
2. Those who buy two or three brands
3. Those who shift from one brand to another
4. Those who have no brand preference
Another way of segmenting the market is to classify buyers accrdng. to their readiness
to buy. The may be categorized into the ff. stages.
1. People who are unaware of the product
2. People who are aware of the product
3. People who are informed of the product
4. People who are interested of the product
5. People who desires the product
6. People who want to buy the product
People’s attitude toward the product may also be classified accrdng. to their degree of
enthusiasm. These are the ff:
1. People who have an enthusiastic attitude toward the product
2. People who have a positive attitude toward the product
3. People who have an indifferent attitude toward the product
4. People who have a negative attitude toward the product
5. People who have a hostile attitude toward the product
Requirements for Effective Segmentation
To be useful and effective, market segmentation must meet the following:
1. It must be measurable
2. It must be substantial
3. It must be accessible
4. It must be actionable