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IDENTIFYING MARKET
SEGMENTS AND TARGETS
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Target Marketing
Target marketing requires marketers to
take three major steps:
Identify and profile distinct groups of buyers
who differ in their needs and preferences
(market segmentation).
Select one or more market segments to enter
(market targeting).
For each target segment, establish and
communicate the key distinctive benefit(s) of
the companys market offering (market
positioning).
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Using Market Segmentation
Segment Marketing
Niche Marketing
Local Marketing
Individual Marketing
Levels of Micromarketing
What is a Market Segment?
A market segment consists of a group
of customers who share a similar set of
needs ad wants.
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Flexible Marketing Offerings

Naked solution:
Product and service
elements that all
segment members
value

Discretionary
options: Some
segment members
value options but not
all
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What is Customerization?
Customerization combines operationally
driven mass customization with customized
marketing in a way that empowers
consumers to design the product and service
offering of their choice.
Preference Segments
Homogeneous preferences exist when
consumers want the same things
Diffused preferences exist when consumers
want very different things
Clustered preferences reveal natural
segments from groups with shared
preferences
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Using Market Segmentation
Basic Market-Preference Patterns
Steps in Segmentation Process
Needs-based segmentation
Segment identification
Segment attractiveness
Segment profitability
Segment positioning
Segment acid test
Marketing-Mix
Strategy
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Segmenting Consumer Markets
Bases for
Segmentation

Geographic
Demographic
Psychographic
Behavioral
Nation or country
State or region
City or metro size
Density
Climate
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Segmenting Consumer Markets
Bases for
Segmentation

Geographic
Demographic
Psychographic
Behavioral
Age, race, gender
Income, education
Family size
Family life cycle
Occupation
Religion, nationality
Generation
Social class
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Segmenting Consumer Markets
Bases for
Segmentation

Geographic
Demographic
Psychographic
Behavioral
Lifestyle
Activities
Interests
Opinions
Personality
Core values
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Segmenting Consumer Markets
Bases for
Segmentation

Geographic
Demographic
Psychographic
Behavioral
Occasions
Benefits
User status
Usage rate
Loyalty status
Buyer-readiness
Attitude
Segmenting for Business Markets
Demographic
Operating Variable
Purchasing Approaches
Situational Factors
Personal
Characteristics
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Segmentation
Measurable Actionable
Substantial Accessible
Differentiable
Characteristics of Effective Segments
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Market Targeting Strategies
Evaluating and selecting market segments
requires assessing the segments overall
attractiveness in light of companys objectives and
resources.
Five patterns of target market selection can then
be considered.
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Market Targeting Strategies
Five Patterns of Target Market Selection
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Market Targeting
Higher costs using differentiated
marketing include:
Product modification cost
Manufacturing cost
Administrative cost
Inventory cost
Promotion cost