Targeting the market

Charles Blankson, Ph.D., Dept. of Marketing & Logistics

Ph.D.Target market selection Presentation and Discussion Charles Blankson. Charles Blankson.D.. Dept. of Marketing & Logistics . Ph.

“segments” etc. Ph. portions.Segmenting & targeting markets • What is Market Segmentation ? Dividing the market (consumers/buyers) into parts. Charles Blankson. of Marketing & Logistics .D. Dept.. sections.

g. • Select target segments Charles Blankson.Operationalization of market segmentation • Identify bases to segment (to divide into parts). Dept. single or multi segments or sole or multi product.. Targeting • Develop measures having decided on the strategy – e. of Marketing & Logistics .D. Ph. • Develop profiles of the segments – look for profit of emerging segments etc.

readiness state. • Behavioral: • Occasions. • Psychographic: • Social class.D. borough.. life style. race. population density. occupation. user status. Charles Blankson. family size. education. city. family life cycle. benefits. religion. county size. • Demographic: • Age. personality.Major segmentation variables for consumer markets • Geographic: • Region. Dept. income. nationality. climate. of Marketing & Logistics . attitude toward the offering. gender/sex. ethnic background. Ph. loyalty status. usage rate.

Situation factors: Urgency.D. customer capabilities Purchasing approaches: Purchasing structure. location Operating variables: Technology. Charles Blankson. Dept. purchasing criteria.. company size. of Marketing & Logistics .Major segmentation variables for industrial/business markets • • • • • • • • • • Demographic: Industry. attitude toward risk/risk aversion. general purchase policy. user/non-user status. loyalty. Ph. size order Personal characteristics: Buyer-seller similarity. nature of existing relationships. specific application.

targeted and served. Ph. Dept. This relates to how easily the segments can be characterized. measured.. Segment Qualification: • The process whereby the operational relevance of the segments identified is assessed.Prioritizing target markets Segment Identification: • Involves the process of aggregating customers into segments in order to satisfy a particular problem. Charles Blankson. of Marketing & Logistics .D.

D. Dept. (e) nature of customer needs and (f) entry barriers. of Marketing & Logistics .Prioritizing target markets Segment Attractiveness: • This concerns deciding which segments to serve and which to ignore. (b) future potential. © level and structure of competition. This involves a range of market attractiveness criteria such as: (a) market growth. Ph. (d) company assets (resources).. Charles Blankson.

D.High School students in Philadelphia. of Marketing & Logistics .. Ph. Dept. PA Charles Blankson.

D. • As Webster. Supplier power. substantiality. • • Competitive rivalry. Dept. accessibility..Market Attractiveness Criteria • • • Literature area Kotler (1994. relevance to major customer group. • Measurable. Buyer power. plus segment compatibility with current marketing and business strengths. operational relevance for market strategy. of Marketing & Logistics . Threat of new entrants. Ph. Threat of substitutes. 2000) Webster (1991) • • Hutt and Speh (1989) Porter (1980) • Attractiveness criteria • Measurability. actionability. Charles Blankson.

Criteria for selecting target markets • • • • • • • • • Profitability Market growth Market size Likely customer satisfaction Sales volume Likelihood of sustainable differential advantage Ease of access of business Opportunities in the industry Product differentiation • • • • • • • • • • • • • • Competitive rivalry Market share Relative strengths in key functions Customers’ price sensitivity Customer image of company Technological factors Fit with business strategy Stability of market Environmental factors Threat of substitutes Barriers to entry Negotiating powers of buyer Ease of profiling customers Supplier power. of Marketing & Logistics . Ph.D. Charles Blankson.. Dept.

Ph. of Marketing & Logistics .D.Diversity of criteria and approaches • • • • • • • • • • Life is simple How many customers Where located Profit levels Sales levels Short but effective Brand loyalty Contributions ($) Market growth rates Competitive intensity • • • • • • • • • • • • Forward thinking Customer fit Future potential sales volumes Customers’ needs Likely differential advantage Financial value to the business. Dept. Analytical Weight Variable 3 Market size 3 Margin 3 Market share 3 Differential advantage/business strengths Charles Blankson..

M. T.407-417. (1989). M. Other profitable segments may be pursued later on and when appropriate. Free Press. Prioritizing Target Markets.Three alternative market selection strategies • Undifferentiated marketing: typically mass marketing • Differentiated marketing: Company pursues one segment at a time with a specific marketing mix tactic • Concentrated: Company uses all efforts to pursue one identified segment at a time. Chicago. Others: Webster F. S. Marketing Intelligence & Planning.D. Dept. No. N. Charles Blankson. New York. and Dibb.Y. New York. 6 & 7. John Wiley. (1980).W. (1991). Ph. Porter.E.Y. (1998).. The Dryden Press.E. Hutt. • • • • • • Lecture based on: Simkin. Vol. IL. L. Competitive Strategy.D. Industrial Marketing Strategy. of Marketing & Logistics . N. and Speh. Business Marketing Management.16. pp.

3 and 4 by next week. 2. Dept. Charles Blankson. of Marketing & Logistics . Ph.D.Reading for next week • Read Chapters 1..

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