MARKETING MANAGEMENT
14th edition
8
Identifying Market
Segments and
Targets

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.

Steps in Market Segmentation,
Targeting, and Positioning
Market Segmentation
1. Identify bases for
segmenting the market
2. Develop segment profiles
Market Targeting
3. Develop measure of
segment attractiveness
4. Select target segments
Market positioning
5. Develop positioning for
target segments
6. Develop a marketing
mix for each segment

Four levels of Micromarketing
Segments
Niches
Local areas Individuals

Segment Marketing
Targeting a group of customers
who share a similar set of
needs and wants.

CHP: 8&10-6
Basic Market Preference Patterns

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.

Segmenting Consumer Markets
Geographic
Demographic
Psychographic
Behavioral

Demographic Segmentation
Age and Life Cycle
Life Stage
Gender
Income
Generation
Social Class

Psychographic
Segmentation:
The VALS
Segmentation
System

Behavioral Segmentation
Decision Roles
• Initiator
• Influencer
• Decider
• Buyer
• User
Behavioral Variables
• Occasions
• Benefits
• User Status
• Usage Rate
• Buyer-Readiness
• Loyalty Status
• Attitude

Behavioral
Segmentation Breakdown

Segmenting for Business Markets
Demographic
Operating Variable
Purchasing Approaches
Situational Factors
Personal
Characteristics

Segmenting for Business Markets
• Demographic segmentation
– Industry, company size, location
• Operating variables
– Technology, usage status,
customer capabilities
• Purchasing approaches
• Situational factors
– Urgency, specific application, size
of order
• Personal characteristics
– Buyer-seller similarity, attitudes
toward risk, loyalty

Effective Segmentation
Criteria
• Size, purchasing power, profiles
of segments can be measured.
• Segments can be effectively
reached and served.
• Segments are large or
profitable enough to serve.
Measurable
Accessible
Substantial
Differential
Actionable
• Segments must respond
differently to different marketing
mix elements & programs.
• Effective programs can be
designed to attract and serve
the segments.

Market Targeting
Evaluating Market Segments
• Segment Size and Growth
– Analyze current sales, growth rates and expected
profitability for various segments.
• Segment Structural Attractiveness
– Consider effects of: competitors, availability of
substitute products and, the power of buyers &
suppliers.
• Company Objectives and Resources
– Company skills & resources needed to succeed in
that segment(s).
– Look for Competitive Advantages.

CHP: 8&10-17
Market Targeting
Market Coverage Strategies
Segment 1
Segment 2
Segment 3
Segment 1
Segment 2
Segment 3
Company
Marketing
Mix
Company
Marketing Mix 1
Company
Marketing Mix 2
Company
Marketing Mix 3
Company
Marketing
Mix
Market
A. Undifferentiated Marketing
B. Differentiated Marketing
C. Concentrated Marketing

CHP: 8&10-18
Patterns of Target Market Selection

CHP: 8&10-19
Patterns of Target Market Selection

CHP: 8&10-20
Patterns of Target Market Selection