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Market Segmentation A fundamental principle of marketing ,[object Object],[object Object],[object Object],[object Object]
Definition ,[object Object],Although not all these consumers are completely alike, they share relatively similar needs and wants Marketing action:  involves efforts, resources, and decisions--product, distribution, promotion,  and price
 
The Principle of Segmentation ,[object Object],[object Object],[object Object]
MARKET SEGMENTATION LOGIC ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Segmentation Variables ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
•  •  •  • •  • •  • •  • •  •  •  •  •  •  •  • • • • •  • • •  • • •  • •  •  •  • No market Segmentation Complete Segmentation Market Segmentation by Income Classes 1, 2, and  3 Market Segmentation by age classes A & B Multi-dimensional  Market Segmentation By income-age class 2 2 1 1 1 3 a a a b b b 1b 1a 2b 3a 3b Different Segmentations of a Market
Creaminess Creaminess Creaminess Sweetness Sweetness Sweetness ••••••••••• ••••••••••••••••• •••••••••••••••••••• •••••••••••••••• ••••••••••••••• •••••••••• •  •  •  • •  •  •  • •  •  •  •  • •  •  •  • •  •  •  •  • •  •  •  •  • •  •  • •  •  •  •  •  • •  •  •  • •  • •  •  •  • •  •  • •  •  • •  •  •  •  •  • •  •  •  • •  • •  •  •  • •  •  • •  •  • •  •  •  •  •  • •  •  •  • •  • •  •  •  • •  •  • Homogeneous   Diffused   Cluster Preferences   Preferences   Preferences Basic Market-Preference Patterns Ice Cream Preference Example
Bases for Segmenting Consumer Markets
[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
[object Object],[object Object],[object Object],[object Object]
[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
  Purchase Behavior   ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Network Category (A way to explain purchase behavior) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
BEVERAGE Liquid  Thirst quenching  Good with Food SUPERORDINATE LEVEL carbonated cola cold slightly sweet Preservatives SOFT DRINK SOFT DRINK fruit slightly sweet nutritious cold all natural B  A  S  I  C   Artificial Sweetener All Natural Soft Drink diet cola diet unusual healthy Orange Juice breakfast Fruit Juice w/ Preservatives artificial taste unhealthy stores well SUBORDINATE LEVEL Network Category
  Benefit Segmentation of the Toothpaste Market Benefit Demographics  Behaviorists  Psychographics  Brand Segments   Network Economy Men   Heavy users   High autonomy  Sale (low    value oriented  Brands price) Medicinal Large   Heavy users   Hypochondriac,  Crest (prevent   families   conservatives decay) Cosmetic Teens,   Smokers   High    Macleans, (bright   young adults,     sociability,   Ultra teeth)     active   Bright Taste Children     Spearmint   High self-  Colgate, (good   lovers     involvement,  Aim Tasting)     hedonistic
SEGMENTING BUSINESS MARKETS Basis…..
[object Object],[object Object],[object Object],[object Object]
[object Object],[object Object],[object Object],[object Object],[object Object]
[object Object],[object Object],[object Object],[object Object]
[object Object],[object Object],[object Object],[object Object]
Requirements for Effective Segmentation
[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Segments--Examples (1) ,[object Object],[object Object],[object Object],[object Object]
Examples (2)   SEGMENTATION FOR COSMETICS ,[object Object]
[object Object]
[object Object],[object Object],[object Object]
 

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Segmentation & Targeting

  • 1.
  • 2.
  • 3.  
  • 4.
  • 5.
  • 6.
  • 7. • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • No market Segmentation Complete Segmentation Market Segmentation by Income Classes 1, 2, and 3 Market Segmentation by age classes A & B Multi-dimensional Market Segmentation By income-age class 2 2 1 1 1 3 a a a b b b 1b 1a 2b 3a 3b Different Segmentations of a Market
  • 8. Creaminess Creaminess Creaminess Sweetness Sweetness Sweetness ••••••••••• ••••••••••••••••• •••••••••••••••••••• •••••••••••••••• ••••••••••••••• •••••••••• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • Homogeneous Diffused Cluster Preferences Preferences Preferences Basic Market-Preference Patterns Ice Cream Preference Example
  • 9. Bases for Segmenting Consumer Markets
  • 10.
  • 11.
  • 12.
  • 13.
  • 14.
  • 15.
  • 16. BEVERAGE Liquid Thirst quenching Good with Food SUPERORDINATE LEVEL carbonated cola cold slightly sweet Preservatives SOFT DRINK SOFT DRINK fruit slightly sweet nutritious cold all natural B A S I C Artificial Sweetener All Natural Soft Drink diet cola diet unusual healthy Orange Juice breakfast Fruit Juice w/ Preservatives artificial taste unhealthy stores well SUBORDINATE LEVEL Network Category
  • 17. Benefit Segmentation of the Toothpaste Market Benefit Demographics Behaviorists Psychographics Brand Segments Network Economy Men Heavy users High autonomy Sale (low value oriented Brands price) Medicinal Large Heavy users Hypochondriac, Crest (prevent families conservatives decay) Cosmetic Teens, Smokers High Macleans, (bright young adults, sociability, Ultra teeth) active Bright Taste Children Spearmint High self- Colgate, (good lovers involvement, Aim Tasting) hedonistic
  • 19.
  • 20.
  • 21.
  • 22.
  • 24.
  • 25.
  • 26.
  • 27.
  • 28.
  • 29.  

Editor's Notes

  1. Personality -- gregarious, introverted, authoritarian, etc.
  2. Occasions -- regular occasion, special occasion benefits sought -- quality, service, economy, speed user status -- nonuser, ex-user, potential user, first-time user, regular user usage rate -- light user, medium user, heavy user loyalty status -- none, medium, absolute readiness stage -- unaware, aware, informed, interested, desirous, intend to buy
  3. Occasions -Travel agency: air travel related to business, vacation or family VACATION= why charter airlines exist - Oranage Juice= extension of occasional use = Not just for B anymore _Mother’s Day and Farther’s Day = promoted to increase sale of candy, flowers and cards. -Curtis Candy company= promoted “trick or treat” at Halloween to get every home ready to dispense candy. Benefits sought -Requires a determination of what major benefits people want In a product class -Yankelovich: Watches= low price, durability, quality Timex= did not focus on only quality segment; Toothpaste User status -Light, medium and heavy users= volume segmentation; Beer study: found that 68% didn’t drink beer; 12% were light users, 16% accounted for 88% of the beer consumption = get one heavy user over several light users.; Loyalty Status: Hard core loyals; Shifting loyals, Swittchers P. 262 Kotler