Download Market-Product Grid

CHAPTER
IDENTIFYING
MARKET
SEGMENTS
AND TARGETS
Segmentation
 Market Segmentation – results in …
Market Segments –groups of people who think
differently from the whole, but the same as each other
 Product Differentiation
Soda? …
Market-product grid showing how different Reebok
shoes reach customer groups with different needs
When to Segment Markets
When the expected gain in sales is larger
than the expense of the process
• Mass produced goods homogenized need but were cheap
• Mass customization is now cheap & encourages choice,
so companies segment by that choice
• Future?-Build-to-Order (BTO) -runs of 1, not 1001,
like Dell Computers
Ann Taylor & Ann Taylor Loft
What is the danger of a two-segment strategy?
If danger is small, segmenting begins
Group Buyers into Segments
 Criteria to Use in Forming the Segments
• Potential for Increased Profit
• Similarity of Needs of Buyers within a Segment
• Difference of Needs of Buyers Among Segments
• Potential of a Marketing Action to Reach a Segment
• Simplicity and Cost of Assigning Buyers to Segments
Criteria for Segmentation
Substantiality
Segment must be large
enough to warrant a special
marketing mix.
Identifiability
Measurability
Segments must be identifiable
and their size measurable.
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.
Segmentation Variables:
Customer Characteristics
Geographic-Location
Demographic-Household
1)
2)
3)
4)
Age & Gender
Income
Ethnic Background
Family Life Cycle
1)
2)
3)
4)
Region of he world
Market size
Market density
Climate
Psychographic- Lifestyles
1)
2)
3)
4)
How time is spent
Values and Beliefs
Spending habits
Education
FIGURE 9-B Segmentation variables and
breakdowns for U.S. consumer markets
Segmentation Variables: Usage
Usage Rate
Usage rate is the quantity consumed or
patronage (store visits) during a specific
period of time.
80/20 Rule
The 80/20 rule is a concept that suggests 80%
of a firm’s sales are obtained from 20 %
of its customers.
Comparison of users and nonusers for
Wendy’s,Burger King, and McDonald’s
Ways to Segment Organizational
Markets
• Customer Characteristics
 Geographic: Statistical Area
 Demographic: NAICS Code
 Demographic: Number of Employees
 Benefits Sought: Product Features
Chart Products to be Sold & Estimate of the
size of the market
Selecting a target market for Wendy’s near a city university
?
Criteria used to Select the Target Market
• Market Size
• Expected Growth
• Compatibility with the Organization’s
Objectives and Resources
• Cost of Reaching Segment
• Competitive Position
Wendy’s
How can Wendy’s target different market
segments with different advertising programs?
FIGURE 9-6 Advertising actions to reach
specific student segments
Market-Product Strategies
Benefits & drawbacks of a co’s market-product strategies
POSITIONING THE PRODUCT
• Product Positioning- Using Perceptual Maps
 Identify Important Attributes for a
Product Class
 Judgments of Existing Brands on These
Important Attributes
 Ratings of an “Ideal” Brand’s Attributes
 Perceptual Map
Product Positioning using Perceptual Maps
Market Segmentation
Market segmentation involves
aggregating prospective buyers into
groups that (1) have common needs and
(2) will respond similarly to a marketing
action.
Market Segments
Market segments are the relatively
homogeneous groups of prospective
buyers that result from the market
segmentation process.
Product Differentiation
Product differentiation is a strategy that
involves a firm’s using different
marketing mix activities to help
consumers perceive the product as being
different and better than competing
products.
Market-Product Grid
A market-product grid is a framework
to relate the market segments of potential
buyers to products offered or potential
marketing actions by the firm.
Usage Rate
Usage rate is the quantity consumed or
patronage (store visits) during a specific
period of time.
80/20 Rule
The 80/20 rule is a concept that suggests
80 percent of a firm’s sales are obtained
from 20 percent of its customers.
Product Positioning
Product positioning refers to the place
an offering occupies in consumers’ minds
on important attributes relative to
competitive products.
Perceptual Map
A perceptual map is a means of
displaying or graphing in two dimensions
the location of products or brands in the
minds of consumers to enable a manager
to see how consumers perceive competing
products or brands relative to its own and
then take marketing actions.