LECTURE-7

Identifying Market
Segments and Targets

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?

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.

Four levels of Micromarketing

Segments Marketing
Niche Marketing
Local areas Marketing
Individuals Marketing

What is a Market Segment?

A market segment consists of a group of

customers who share a similar set of needs
and wants.

Flexible Marketing Offerings

Naked solution:
Product and service
elements that all
segment members
value.
Example: Base
model of the vehicle.

Discretionary options:
Some segment
members value options
but not all.
Example: Same model
with different features.

Preference Segments

Homogeneous preferences exist when

consumers want the same things.

Diffused preferences exist when consumers

want very different things.

Clustered preferences reveal natural segments

from groups with shared preferences.

Niche Marketing
A niche is more narrowly defined customer
group seeking a distinctive mix of benefits.

Niche Marketing

Revolution

Revolution pioneered the concept of

plus sized fashion, and is very proud
to be a brand that accepts women as
they are.
http://www.revolution.bz/aboutus.php

What is Customerization?
Customerization combines operationally driven
mass customization with customized
marketing in a way that empowers consumers
to design the product and service offering of
their choice.

Bases For Segmenting Consumer Markets

Geographic Segmentation
Division of the market into different geographical units
such as nations, states, regions, countries, cities or
neighborhoods etc.

Demographic Segmentation
We divide the market into groups on the basis of
variables such as age, family size, family life cycle,
gender, income, occupation, religion, race,
generation, nationality and social class etc.

Bases For Segmenting Consumer Markets

Psychographic Segmentation
Buyers are divided into different groups on the basis of
psychological/personality traits, lifestyle, or values.

Behavioral Segmentation
Marketers divide buyers into groups on the basis of
their knowledge of, attitude toward, use of, or response
to a product.

Demographic Segmentation

Age and Life-Cycle Stage

Gender
Income
Generation
Social Class
Occupation

Behavioral Segmentation
Decision Roles

Behavioral Variables

Initiator
Influencer
Decider
Buyer
User

Occasions
Benefits
User Status
Usage Rate
Buyer-Readiness
Loyalty Status
Attitude

The Brand Funnel Illustrates Variations in

the Buyer-Readiness Stage

Aware
Ever tried
Recent trial
Occasional user
Regular user
Most often used

Loyalty Status

Hard-core
Consumer who buy only one brand all the time.

Split loyals
Consumers who are loyal to two or three brands.

Shifting loyals
Consumers who shift loyalty from one brand to another.

Switchers
Consumers who show no loyalty to any brand.

Segmenting for Business Markets

Demographic
Industry/Company Size/Location

Operating variable
Technology/User Non User status/Customer
capabilities

Purchasing approaches
Purchasing Function Organization/Power
Structure/Nature Of Existing relationship/General
Purchasing policies/Purchasing Criteria

Segmenting for Business Markets..

Situational factors
Urgency/Specific Application/Size or Order

Personal characteristics
Buyer Seller Similarity/Attitude Toward Risk/Loyalty

Steps in Segmentation Process

Need-based segmentation
Segment identification
Segment attractiveness
Segment profitability
Segment positioning
Segment acid test
Market mix strategy

Effective Segmentation Criteria

Measurable
Substantial
Accessible
Differentiable
Actionable

Bibliography
Marketing Management A South Asian Perspective
by Philip Kotler, Kevin Lane Keller, Abraham Koshy &
Mithileshwar Jha, 13th Edition, Published by Pearson
Education, Inc.
Strategic Marketing Management Meeting The
Global Marketing Challenges by Carol H. Anderson &
Julian W. Vincze Published by Houghton Mifflin Company.
Principles of Advertising & IMC by Tom Duncan 2nd
Edition, Published by McGraw-Hill Irwin.
Principles of Marketing by Philip Kotler & Gary Armstrong
Thirteenth Edition, Published by Prentice Hall

"Don't be afraid of the space between

your dreams and reality.
If you can dream it, you can make it so."
Belva Davis

The End