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MARKETING MANAGEMENT

12th edition

8
Identifying Market
Segments and
Targets

Kotler

Keller

Chapter Questions
• What are the different levels of market
segmentation?
• How can a company divide a market into
segments?
• How should a company choose the most
attractive target markets?
• What are the requirements for effective
segmentation?
8-2

Mature
consumers
are a rapidly
growing market

8-3

8-4 . • Select one or more market segments to enter.Effective Targeting Requires… • Identify and profile distinct groups of buyers who differ in their needs and preferences. • Establish and communicate the distinctive benefits of the market offering.

Ford’s Model T Followed a Mass Market Approach 8-5 .

Four levels of Micromarketing Segments Niches Local areas Individuals 8-6 .

8-7 .Segment Marketing Targeting a group of customers who share a similar set of needs and wants.

Flexible Marketing Offerings • Naked solution – Product and service elements that all segment members value • Discretionary options – Some segment members value – Options may carry additional charges 8-8 .

1 Basic Market Preference Patterns 8-9 .Figure 8.

Niche Marketers Enterprise Rent-a-Car targets the insurancereplacement market 8-10 .

Niche Marketers: Tom’s 8-11 .

The Experience Economy Experience Services Goods Commodity 8-12 .

8-13 .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.

2 Examples of Market Customization 8-14 .Figure 8.

Segmenting Consumer Markets Geographic Geographic Demographic Demographic Psychographic Psychographic Behavioral Behavioral 8-15 .

Claritas’ Prizm 8-16 .

Demographic Segmentation Age Age and and Life Life Cycle Cycle Life Life Stage Stage Gender Gender Income Income Generation Generation Social Social Class Class 8-17 .

Toyota Scion targets Gen Y consumers 8-18 .

Figure 8.3 Profiling American Generations • GI Generation – 1901-1924 • Silent Generation – 1925-1945 • Baby Boomers – 1946-1964 • Generation X – 1965-1977 • Generation Y – 1978-1994 • Millenials – 1995-2002 8-19 .

4 The VALS Segmentation System 8-20 .Figure 8.

Behavioral Segmentation Decision Roles • Initiator • Influencer • Decider • Buyer • User Behavioral Variables • Occasions • Benefits • User Status • Usage Rate • Buyer-Readiness • Loyalty Status • Attitude 8-21 .

Mobil’s 5 Customer Segments 8-22 .

Loyalty Status Hard-core Split loyals Shifting loyals Switchers 8-23 .

The Conversion Model Convertible Shallow Users Strongly unavailable Weakly unavailable Average Entrenched Nonusers Ambivalent Available 8-24 .

Figure 8.5 Behavioral Segmentation Breakdown 8-25 .

Segmenting for Business Markets Demographic Demographic Operating Operating Variable Variable Purchasing Purchasing Approaches Approaches Situational Situational Factors Factors Personal Personal Characteristics Characteristics 8-26 .

BB&T Bank’s B-to-B advertising 8-27 .

Nextel 8-28 .

Models of Sequential Segmentation Stage of decision • First-time prospects • Novices • Sophisticates Orientation • Price-oriented • Solution-oriented • Strategic-value 8-29 .

Steps in Segmentation Process Needs-based segmentation Segment identification Segment attractiveness Marketing-Mix Strategy Segment profitability Segment positioning Segment acid test 8-30 .

6 Patterns of Target Market Selection 8-31 .Figure 8.

Figure 8.6 Patterns of Target Market Selection 8-32 .

6 Patterns of Target Market Selection 8-33 .Figure 8.

Effective Segmentation Criteria Measurable Measurable Substantial Substantial Accessible Accessible Differentiable Differentiable Actionable Actionable 8-34 .

7 Segment-by-Segment Invasion Plan 8-35 .Figure 8.

Pepsi used megamarketing in India 8-36 .

Mass marketing is dead. 2. Mass marketing is still a viable way to build a profitable brand. 8-37 .Marketing Debate  Is mass marketing dead? Take a position: 1.

Marketing Discussion  How would you classify yourself in terms of the various segmentation schemes? 8-38 .