Levels of Market Segmentation

Mass Market

Segment Segment
Segment Segment

Niche Depending on an organization’s size
and resources, different segmentation
strategies may be employed at the same
1:1 time.

Copyright © 2007 6-1

not addressing any distinct characteristics among the consumers. Mass Marketing “One basic marketing strategy appealing to a broad range of consumers.” Wal-Mart Copyright © 2007 6-2 .

” Copyright © 2007 6-3 . Market Segmentation “Dividing a large market (mass market) into smaller homogeneous markets (segments) based on common needs and / or similar lifestyles.

Sleeman’s directs all resources at Beer the premium niche. Niche Marketing Marketing to subgroups within a segment where there is less competition. MainstreamBeers Beers Value ValueBeers Beers Copyright © 2007 6-4 . They grew BeerSegments Segments Premium when beer drinkers shifted from PremiumBeers Beers Mainstream mainstream beers to craft beers.

Direct (1:1) Segmentation “Unique marketing programs are designed to meet the needs and preferences of individual customers.”  Database management techniques  Mass customization  Customer relationship management  Direct communications Copyright © 2007 6-5 .

Copyright © 2007 6-6 . Selecting Targets Segmentation involves three essential steps: 1. Identifying market segments 2. Positioning product to appeal to target. Selecting segments with the greatest potential $ $ $ 3.

Copyright © 2007 6-7 . Demographic Demographic What emerges is a Psychographic Psychographic target market profile. a Geographic Geographic portrait of the ideal Behaviour Behaviour Response Response consumer. Identifying Target Markets Targets are identified based on certain characteristics.

MaritalStatus Status Household HouseholdFormation Formation Ethnic EthnicBackground Background Copyright © 2007 6-8 . Demographic Segmentation Characteristics Characteristics Age Age Gender Gender Marketers monitor Income Income demographic trends and Occupation Occupation adjust marketing Education Education Marital strategies appropriately.

Age Segments  Canada’s population is aging Youth Youth  Generation Y to become a GenerationYY Generation powerful buying group GenerationXX Generation  Retaining older customers BabyBoomers Baby Boomers while attracting new Greys Greys customers is a challenge Copyright © 2007 6-9 .

Men are reinventing themselves (personal care). Gender Targeting 1. Influence of women in decision-making is underestimated by many organizations. Gender stereotyping should be avoided. Copyright © 2007 6-10 . Changing roles leads to “unisex” targeting. 2. 4. Need to communicate more intelligently. 3.

13. Montreal and Vancouver.4% of population are visible minorities (43% in Toronto). 2. Copyright © 2007 6-11 . 3. Accessible market niches in Toronto. Ethnic Targeting 1. Ethnic-inspired products and communications have an impact.

••Geodemographics Geodemographics Copyright © 2007 6-12 . Geographic Segmentation Distinct geographic regions present challenges for marketers. Unique needs may ••Suburban Suburban necessitate micromarketing ••Rural Rural strategies. ••Language Language Regional opportunities must ••Culture Culture be assessed (costs versus ••Urban Urban benefits).

” When lifestyle considerations are included demographic segments are quite different. Axe deodorant was launched solely on the basis of psychographic profiling of young males. Psychographic Segmentation “Identifying a target based on the activities. interests. Copyright © 2007 6-13 . and opinions (the lifestyle) of consumers.

 Occasion for use  Benefits Sought  Usage Rate  Loyalty Response Copyright © 2007 6-14 .Behaviour Response Segmentation Behavioural influences are considered along with other segmentation variables.

with Market many products with unique Differentiation Differentiation marketing strategies. Copyright © 2007 6-15 . Market Segmentation Strategies Market Operate in many segments. Niche Niche All resources aimed at a distinct Marketing Marketing segment. TSN (The Sports Network) is a nicher. QTG Canada (Quaker Tropicana Gatorade) is a differentiator.

Integrators don’t stand still. they respond to new needs. • Wal-Mart adds groceries • Loblaw and other supermarkets add pharmacies Copyright © 2007 6-16 .Market Segmentation Strategies Market A company expands from a Market Integration segment to embrace other Integration similar segments The battle for customers today is very intense.

Copyright © 2007 6-17 . Positioning “The place a brand occupies in the customer’s mind in relation to competing products. 2.” Positioning involves a 2-Step Process: 1. Create appropriate appeals to differentiate the product in the customer’s mind. Develop and market a product that meets needs.

Positioning Strategies 1. Brand Leadership 3. Innovation 5. Head-on 2. Lifestyle Copyright © 2007 6-18 . Product Differentiation 4.

Cadillac reinvented itself. mind.” mind. The preferences of a target market change. It’s no longer grandpa’s car! Copyright © 2007 6-19 .” 2. The activity of a direct in inthe theconsumer’s consumer’s competitor. Repositioning “Changing Repositioning is due to: “Changingthe theplace place aaproduct productoccupies occupies 1.