SEGMENTATION

Session 8 SUBHADIP ROY

Steps in Market Segmentation, Targeting, and Positioning

Questions

How

can a company identify the segments that make up a market? What criteria can a company use to choose the most attractive target markets?

Fords Model T Followed a Mass Market Approach??????

The Ford Ad

Issues To Begin With

Mass-Marketing

vs. Segmentation Sector vs. Segment Flexi-Offerings

Naked Solution Discretionary Option

Four Levels of Micromarketing

Segments Niches

Local areas

Individuals

Preference Patterns
Homogeneous Diffused Clustered

Bases for Segmenting Consumer Markets

Geographic Demographic Psychographic

(Lifestyle, Personality,

Values) Behavioural (Occasion, User Status, Usage Rate)

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

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

Multi-attribute Bases
Geodemographic Psychodemographic Psychobehavioural

Patterns of Target Market Selection

Patterns of Target Market Selection

Patterns of Target Market Selection

Segmenting Industrial Markets

Industrial marketers can hardly be blamed for feeling that segmentation is very difficult for them. Not only has little been written on the subject as it affects industrial markets, but such analysis is also more complex than for consumer markets. - Benson P. Shapiro Thomas V. Bonoma HBR, 2001

SEGMENTATION BASES -Shapiro and Bonoma

DEMOGRAPHICS OPERATIONAL VARIABLES PURCHASING APPROACH SITUATIONAL FACTORS

PERSONAL CHARACTERISTICS

SEGMENTATION BASES

DEMOGRAPHICS

OPERATING VARIABLES

THE INDUSTRY COMPANY SIZE CUSTOMER LOCATION COMPANY TECHNOLOGY PRODUCT AND BRAND USE STATUS CUSTOMER CAPABILITIES PURCHASING FUNCTION ORGANIZATIONS POWER STRUCTURE GENERAL PURCHASING POLICIES BUYER-SELLER RELATIONSHIPS

PURCHASING APPROACH

SEGMENTATION BASES Contd.

SITUATIONAL FACTORS

URGENCY PRODUCT APPLICATION SIZE OF ORDER

PERSONAL CHARACTERISTICS OF THE BUYER

PERSONALITY VARIABLES APPROACH TO BUYING LOYALTY

VALS Framework
o VALS tries to explain the relations between consumer personality traits and overall consumer behavior. VALS uses psychology to analyze the dynamics underlying consumer preferences and choices. o Developed built by Arnold Mitchell to explain changing U.S. values and lifestyles in the 1970s. VALS was formally inaugurated as an SRI International product in 1978

The VALS People

Innovators Sophisticated, high self esteem, upscale and image is important Thinkers Conservative, practical, income allows many choices, look for value Achievers Goal oriented lifestyle, image is very important Experiencers Like cool stuff, like excitement and variety spend a high proportion of income on fashion Believers Conservative, like familiar and established brands Strivers Trendy and fun loving, money defines success, concerned about the opinion of others Makers Practical people, do it yourself, unimpressed by material possessions, prefer value to luxury Survivors Few resources, buy at a discount, very modest market, little motivation to buy

Effective Segmentation
Only

Measurable Substantial Accessible Differentiable Actionable

when the segment is:

Evaluation of Segments
QUALITATIVE METHODS

DELPHI PANEL CONSENSUS HISTORICAL ANALOGY SALES FORCE COMPOSITE

TREND PROJECTIONS REGRESSION ANALYSIS CORRELATION ANALYSIS INPUT/OUTPUT ANALYSIS ECONOMETRIC MODELS

QUANTITATIVE METHODS

Thank You, Class