Focusing on the Customer: Segmenting and Targeting

.Market Segmentation Defined  Market segmentation involves dividing the total market into groups of customers having relatively common or homogeneous needs and attempting to develop a marketing mix that appeals to one or more of these groups.

opinions.3)  Behavioral segmentation – segment based on consumer behavior or product usage (see next slide). interests and personality.Bases for Segmenting Consumer Markets (show exhibit 6. lifestyles. Demographic segmentation – segment based on demographic characteristics. Geographic segmentation . Psychographic segmentation – segment based on motives.segment based on geographic characteristics. attitudes.    .

Benefit Segmentation of the Snack Food Market .

major accounts vs. auto manufacturers. Benefits Sought – e..Bases for Segmenting Business Markets  Type of Organization – e. others.g.    . glass manufacturer segments market into furniture makers. quality level desired.. etc.g.g. Organizational Characteristics – e.. price level.. location or product usage.g. Relationship Intensity – e. based on size. service level.

Determine potential customer needs. 3. Identify those needs that characterize each submarket. 4.e. 6. Name (nickname) the possible product markets.Identifying Markets to Serve 1. Make a rough estimate of the size of each productmarket segment. “narrow” productmarkets. 2. 5.. Divide the market on relevant dimensions into homogeneous submarkets--i. . Name the broad product-market.

focus on one segment. Micromarketing (segment-of-one) . Concentration approach .focus on several segments. A target market is a fairly homogeneous group of customers to whom a company wishes to appeal.focus on individual. Choose a segmentation approach:      Multisegment approach .Determine Segmentation Strategy  Choose the target market(s).  . Niche approach – focus on a small well-defined segment with specific unique needs. Combination approach .combine one or more segments.

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