Chapter+8-Segmentation

8/7/2019 Chapter+8-Segmentation

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Identifying

Market Segments

and Targets

8

Marketing Management

A South Asian Perspective, 13th

ed


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Copyright 2009 Dorling Kindersley (India) Pvt. Ltd. 8-2

Chapter Questions

What are the different levels of market

segmentation?

How can a company divide a marketinto segments?

How should a company choose the

most attractive target markets?

What are the requirements for effective

segmentation?


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Effective Targeting Requires

Identify and profile distinct groups of

buyers who differ in their needs and

preferences Select one or more market segments to

enter

Establish and communicate the

distinctive benefits of the market

offering


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Fords Model T Followed a Mass

Market Approach


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Four levels of Micromarketing

Segments

Local areas Individuals

Niches


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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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Gather.com: A Niche

Social Networking Site


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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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Preference Segments

Homogeneous preferences exist

when consumers want the same things

Diffused preferences exist whenconsumers want very different things

Clustered preferences reveal natural

segments from groups with shared

preferences


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The Himalaya DrugCompany serves a

growing niche

market by focusingon ayurvedic

medicines and

health supplements


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The Long Tail

Chris Anderson explains the long tailequation:

The lower the cost of distribution, the more

you can economically offer without havingto predict demand;

The more you can offer, the greater thechance that you will be able to tap latent

demand for minority tastes; and Aggregate enough minority taste, and you

may find a new market.


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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 serviceoffering of their choice.


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United BankLtd. of

Pakistan offers

customizedGalleria credit

cards to its

customers


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Segmenting Consumer Markets

Geographic

Demographic

Psychographic

Behavioral


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Demographic Segmentation

Age and Life Cycle

Life Stage

Gender

Income

Generation

Social Class


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Bank Al Habib

targetssenior citizens


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Dove Targets Women


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Figure 8.1

The VALS Segmentation System


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Behavioral Segmentation

Decision Roles

Initiator

Influencer Decider

Buyer

User

Behavioral Variables

Occasions

Benefits User Status

Usage Rate

Buyer-Readiness Loyalty Status

Attitude


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The Brand Funnel Illustrates

Variations in the

Buyer-Readiness Stage

Aware

Ever tried

Recent trial

Occasional user

Regular user

Most often used


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Loyalty Status

Switchers

Shifting loyals

Split loyals

Hard-core


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Figure 8.3 Behavioral

Segmentation Breakdown


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The Conversion Model

Convertible Shallow Average Entrenched

Strongly

unavailableAmbivalent Available

Weakly

unavailable

Users Nonusers


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Segmenting for Business Markets

Demographic

Operating Variable

Purchasing Approaches

Situational Factors

Personal

Characteristics


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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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Effective Segmentation Criteria

Measurable

Substantial

Accessible

Differentiable

Actionable


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The Revolution

brand of ready-

made womens

apparel

successfully

focuses on the

niche segment of

plus-size clothes.


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Pepsi used Megamarketing in India

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Chapter+8-Segmentation