Wong, audren chapter 8 identifying market segments and targets

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Identifying Market Segments and Targets

Wong, Audren Allen T.MD12-0073

Marketing ManagementAteneo School of Medicine and Public Health

Chapter 8…


• Target Marketing• Market Segment• Consumer characteristics and responses

– Geographic Segmentation• Grassroots marketing

– Demographic Segmentation– Multicultural marketing– Psychographic Segmentation– Behavioral Segmentation

• Combining data for richer consumer description• Not all segmenting schemes are useful• Steps in the Segmentation Process• Selecting Market Segments

OUTLINE


Concept 1: Target marketing

• Companies cannot connect with all customers in large, broad, or diverse markets• Kotler Example: Club Med

• “To compete more effectively…[companies] are now focusing on those consumers they have the greatest chance of satisfying.” • Kotler:

• Target marketing• Segmentation:

– Identify and profile market segments– Select market segment(s) to enter– Establish and communicate distinctive benefit(s) of the company’s

market offering


Concept 2: Bases for Segmenting Consumer Markets

• Market segments– Large, identifiable groups within a market– Group of customers who share a similar set of

needs and wants

• Marketer’s Job:– Identify appropriate number and nature of market

segments– Decide which one to target


How do we define market segments?

• Consumer Characteristics• Consumer Responses

• “Do these segments exhibit different needs or product responses?– Kotler and Local: Attitude of

“professionals,” “blue collars,” etc on “safety” as a product benefit?

– Medical: Clearance for work vs Clearance for elective procedures

• Geographic• Demographic• Psychographic• Behavioral


Concept 3: Geographic Segmentation

• Divide into geographical units– Kotler/Local: Nation, States, Regions, Countries, Cities,

Neighborhoods– Medical Application: Medical Diagnostics Hubs in densely

populated areas


• Getting as close and personally relevant to individual customers as possible– Kotler: Nike (sponsorship of local school teams, expert-conducted

clinics, provision of shoes, clothing, equipment); Citibank and neighborhood demographics, Curves

– Local: GK – Medicine: Gov’t Medical Missions

Concept 4: Grassroots marketing


– Kotler: Crest and Colgate to age and life cycle stage (kids, adults, older consumers), Pampers

– Local: Dove deodorants for men/women – Medical: Belo

Concept 5: Demographic Segmentation


• Approach recognizing that different ethnic and cultural segments have sufficiently different needs and wants to require targeted marketing activities

• Growing Hispanic American, African American, Asian American Markets buying power

• Can result in different marketing messages, media, channels, etc.– Kotler: McDonalds “I’m Loving It” rooted in hip-hop culture; – RP: LGBT– Medical: Topic conferences in TMC

Concept 6: Multicultural Segmentation


• Psychographics– Using psychology and demographics to better understand

consumers– Grouped on the basis of psychological/personality traits,

lifestyle, or values– Kotler/Local: VALS (Innovators, Thinkers, Achievers,

Experiencers, Believers, Strivers, Makers, Makers, Survivors)

– Medical: Who is willing to avail of latest medical treatments made available in the Philippines (e.g. Stem cell)

Concept 7: Psychographic Segmentation


• Grouped on the basis of knowledge of, attitude toward, use of, or response to a product

• Needs and benefits– Enthusiast, Image Seekers, Savvy Shoppers, Traditionalist, Satisfied

Sippers, Overwhelmed• Decision Roles

– Kotler: Men and shaving equipment; women and panty hoses• User and Usage

– Occasions, User Status – Kotler/Medical: On user status: For blood donors (first-time, ex-donors)

• Buyer-Readiness Stage• Loyalty Status:

– Hard-core loyals; Split loyals, Shifting loyals, Switchers

Concept 8: Behavioral Segmentation


• Kotler: PRIZM (Potential Rating Index by Zip Markets), US Army, Sodexho Marriott, Ace Hardware

• Medical: Diagnostic Packages, Medicines for senior citizens

• Demographic variables are the most important, followed by the operating variables – down to the personal characteristics of the buyer

Concept 9: You can combine data to yield even richer descriptions of consumers


• Kotler/ Local: Table Salt and customer’s color of hair

• Medial: You don’t see routine blood tests being marketed individually

• To be useful, market segments must rate favorably on 5 key criteria– Measurable – Substantial– Accessible– Differentiable– Actionable

Concept 10: Not all segmentation schemes are useful


• Needs-Based Segmentation• Segment Identification• Segment Attractiveness• Segment Profitability• Segment Positioning• Segment “Acid Test”• Marketing-Mix Strategy

Concept 11: Steps in the Segmentation Process


• Undifferentiated/ Mass marketing– Goes after the whole market with one offer– Appropriate when all consumers have roughly same

preferences• Kotler: Model T-Ford has only one color, black• Local: Magic Sarap for Filipino households• Medical: Multivitamin commercials

– High potential, lower cost, lower prices, higher margins

• Differentiated marketing– Groups of consumers with different wants/needs– Fine-tune marketing program/activities

• Kotler/Local: Estée Lauder, Clinique• Medical: Met, skin-whitening products

Concept 12: Selecting market Segments (Targeting)


• Multiple Segment Specialization– Selective Specialization– Selects a subset of all the possible segments, each objectively

attractive an appropriate– Little or no synergy

• Kotler: Crest Whitestrips

• Product specialization– Selling a product to several different market segments

• Kotler: Microscopes sold to university, government, and commercial laboratories

• Medical: Braun products in medical schools and hospitals (e.g. IV needles)



• Market specialization– Serving many needs of a particular customer group

• Kotler: • Local/Medical: Braun medical skills training in medical schools

• Single Segment Specialization– Marketing to only one segment– Niche - narrowly defined customer group seeking a distinctive mix

of benefits within a segment (subsegments)• Kotler: Porche on sports car market, Volkswagen on small-car market• Local: Jeepneys and Tricycles• Medical: Doctor J (Medical market)



• Individual Marketing– Ultimate level of segmentation leads to “segments of one,”

“customized marketing,” or “one-to-one marketing”– Kotler: use of internet: eBay, iTunes, Amazon– Local: OLX– Medical: (?)



• Target marketing includes three activities: market segmentation, market targeting, and market positioning

• Market segments are large, identifiable groups within a market.• Two bases for segmenting consumer markets are consumer

characteristics and consumer responses.• The major segmentation variables for consumer markets are

geographic, demographic, psychographic, and behavioral. Marketers use them singly or in combination

• To be useful, market segments must be measurable, substantial, accessible, differentiable, and actionable

• We can target markets at four main levels: mass, multiple segments, single (or niche) segment, and individuals.

• A niche is a more narrowly defined group. Globalization and the Internet have made niche marketing more feasible to many.

SUMMARY


Identifying Market Segments and Targets

Wong, Audren Allen T.MD12-0073

Marketing ManagementAteneo School of Medicine and Public Health

Chapter 8…

Education

Wong, audren chapter 8 identifying market segments and targets