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Market Segmentation
Market
People or organizations with needs or wants and the ability and willingness to buy A subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs. The process of dividing a market into meaningful, relatively similar, identifiable segments or groups.
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A Market is...
(1) (2) people or organizations with needs or wants, and with
(3)
(4)
A group of people that lacks any one of these characteristics is NOT a market.
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Members of targeted segments must be reachable with Accessibility marketing mix. Unless segment responds to a Responsiveness marketing mix differently, no separate treatment is needed.
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Segmentation Bases
Characteristics of individuals, groups,
or organizations used to divide a total market into segments.
(variables)
Geographic Segmentation
Segmenting markets by
market size
market density climate
New ways to generate sales in sluggish and competitive markets Scanner/POS data allow assessment of best selling brands in region Regional brands appeal to local preferences
Demographics
Psychographics Benefits Sought Usage Rate
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Demographic Segmentation
Segmenting markets by age, gender, income, ethnic background, and family life cycle
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Age
Gender
Income
Ethnic background
Marital Status
Children
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Psychographics
Benefits Sought Usage Rate
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Psychographic Segmentation
Market segmentation on the basis of personality, motives, lifestyles, and geodemographics.
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Motives Lifestyles
Psychographic Segmentation Geodemographics
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Lifestyle Segmentation
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Geodemographic Segmentation
Segmenting potential customers into neighborhood lifestyle categories. Combines geographic, demographic, and lifestyle segmentation.
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Benefits Sought
Usage Rate
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Benefit Segmentation
The process of grouping customers into market segments according to the benefits they seek from the product.
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Usage Rate
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Usage-Rate Segmentation
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Share of sales
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Target Market
A group of people or organizations for which an organization designs, implements, and maintains a marketing mix intended to meet the needs of that group, resulting in mutually satisfying exchanges.
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Disadvantages:
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A strategy used to select one segment of a market (a niche) for targeting marketing efforts.
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Disadvantages:
Cannibalization
Situation that occurs when sales of a new product cut into sales of a firms existing products.
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Position
The place a product, brand, or group of products occupies in consumers minds relative to competing offerings.
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Positioning
Developing a specific marketing mix to influence potential customers overall perception of a brand, product line, or organization in general.
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Product Differentiation
A positioning strategy that some firms use to distinguish their products from those of competitors.
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Perceptual Mapping
A means of displaying or graphing, in two or more dimensions, the location of products, brands, or groups of products in customers minds.
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Repositioning
Changing consumers perceptions of a brand in relation to competing brands.
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