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Segments and
Targets
ESTEBAN | FERIA | LUCOT
◦ What are the different levels of
market segmentation?
◦ In what ways can a company
divide a market into segments?
◦ What are the requirements for
OBJECTIVES effective segmentation?
◦ How can a business markets be
segmented?
◦ How should a company choose
the most attractive target
markets?
2
“
Market Segmentation is a
natural result of the vast
differences among people.
-Donald Norman
3
TARGET MARKETING
Many companies are now embracing this.
They focus on those consumers they have the
greatest chance of satisfying instead of
scattering their marketing efforts.
4
target
marketing
requires three
steps
Identify and profile
distinct group of buyers
step who differ in their needs
1
and preferences (market
segmentation).
6
Select one or more
step market segments to
2
enter (market targeting).
7
Establish and
communicate the
products’ key distinctive
step benefit(s) of the
3
company’s market
offering (market
positioning).
8
Levels and Patterns of Market
Segmentation
Market segmentation is an effort to increase a
company’s precision marketing.
9
Segment Marketing
11
Geographic
Segmentation
12
Grassroots Marketing
13
Customer Cloning
14
Geoclustering
- combine geographic data with
demographic data
- captures increasing diversity of the
population
15
Demographic
Segmentation
-the market is divided into
basis groups in the basis of
2 variables such as age, family
size, family life cycle, gender,
income, etc.
16
two reasons 1. Affiliation with
for the
popularity of demographic
demographic variables
variables 2. Easier to measure
17
Demographic
segmentation
18
Psychographic
Segmentation
-is the science of using
basis psychology and demographics
3 to understand consumers.
❏ psychological/personality
traits
❏ Lifestyle or values
19
VALS (formerly known as “Values and
Lifestyles”) which originally developed on 1970s.
20
◦ Innovators- successful,
sophisticated and have high self
four esteem
segments ◦ Thinkers- motivated by ideals
with more ◦ Achievers- looking for
resources
consensus and stability
◦ Experiencers- young,
enthusiastic and impulsive
21
◦ Believers-conservative,
conventional and traditional
22
◦ Integrators- innovative; exposed
to wide range of media
◦ Self Innovators & Self
Psychographic
Segmentation Adaptors- these consumers desire
Schemes- often personal experience and
customized by
◦ Ryoshiki Innovators &
culture
Ryoshiki Adaptors- Ryoshiki
means “good values”, consumers
focused on their occupation.
23
◦ Traditional Innovators &
Traditional Adaptors- follow
traditional religions and customs
Psychographic ◦ High Progmatics & Low
Segmentation
Schemes- often Progmatics- few interest and
customized by uncommitted in their lifestyle
culture choices
◦ Sustainers- they dislike
innovation and tend to focus on
sustaining the past
24
Behavioral
Segmentation
Basis Buyers are divided into
4 groups in the basis of their
knowledge of, attitude
toward, use of, or a response
to a product
25
Behavioral
Segmentation
26
Behavioral
Segmentation
27
◦ Occasions- buyers can be
distinguished according to the occasions
when they develop a need , purchase a
product or use a product.
29
Sample Marketing Funnel
30
◦ Loyalty Status
➢ Hard-core Loyals- one brand all the
time
➢ Split Loyals- loyal to two or three
brands
User & Usage ➢ Shifting Loyals- shift loyalty from
one brand to another
➢ Switchers- no loyalty to any brand
◦ Attitude- Five attitude groups can be
found in a market: enthusiastic, positive,
indifferent, negative and hostile.
31
Behavioral
Segmentation
Breakdown
32
BASES FOR SEGMENTING
BUSINESS MARKETS
33
Demographic Characteristics
34
Operating Variables
1. Technology- What customer
MAJOR technologies should we focus
SEGMENTATION on?
VARIABLES 2. User or non-user status- heavy
FOR BUSINESS users, medium, light or non-
MARKETS
users?
3. Customer Capabilities-
customers needing many or few
customers?
35
Purchasing Approaches
1. Purchasing-function
MAJOR Organization- companies with
SEGMENTATION
highly centralized or decentralized
VARIABLES
purchasing organizations?
FOR BUSINESS
MARKETS 2. Power Structure- companies that
are engineering dominated,
financially and so on?
36
Purchasing Approaches
3. Nature of Existing Relationships-
MAJOR serve companies which have strong
SEGMENTATION
relationships or simply go after the
VARIABLES
FOR BUSINESS most desirable companies?
MARKETS 4. General Purchase Policies-
companies that prefer leasing?
Service contracts? system purchases?
Sealed bidding?
37
Purchasing Approaches
MAJOR
SEGMENTATION 5. Purchasing Criteria- should we
VARIABLES serve companies that are seeking
FOR BUSINESS quality, service or price?
MARKETS
38
Situational Factors
1. Urgency- Companies that need
quick and sudden delivery or
MAJOR
service?
SEGMENTATION
VARIABLES 2. Specific Application- focus on
FOR BUSINESS certain applications of our
MARKETS products rather than all
applications?
3. Size of Order- focus on large or
small orders?
39
Personal Characteristics
41
Segmentation
process steps
by Roger Best
42
Segmentation
process steps
43
44
• Skillshare- “Tomorrow is for the
taking. Thousands of classes to help
you do your best work”
• Netflix- "Watch Anywhere. Cancel
Anytime"
• Spotify- music for everyone
45
Effective Segmentation
Criteria
46
5 KEY CRITERIA
EFFECTIVE
1. Measurable
SEGMENTATION 2. Substantial
CRITERIA 3. Accessible
4. Differentiable
5. Actionable
47
5 KEY CRITERIA
1. Measurable
EFFECTIVE - The size, purchasing
SEGMENTATION
CRITERIA power and
characteristics of the
segments can be
measured
48
5 KEY CRITERIA
2. Substantial
EFFECTIVE
SEGMENTATION - Segments are large and
CRITERIA
profitable enough to
serve
49
5 KEY CRITERIA
EFFECTIVE
3. Accessible
SEGMENTATION
CRITERIA - Segments can be
effectively reached and
served.
50
5 KEY CRITERIA
EFFECTIVE
SEGMENTATION
4. Differentiable
CRITERIA - Segments are conceptually
distinguishable and respond
differently to different
marketing-mix elements and
programs
51
5 KEY CRITERIA
EFFECTIVE
SEGMENTATION
5. Actionable
CRITERIA - Effective programs can
be formulated for
attracting and serving
the segments
52
5 FORCES BY
5 Forces that MICHAEL PORTER
Determine the
Intrinsic Long- 1. Industry Competitors
Run 2. Potential Entrants
Attractiveness
of a Market 3. Substitutes
Segment 4. Buyers
5. Suppliers
53
5 FORCES THREATS
Industry Competitors Threat of Intense Segment
Rivalry
Potential Entrants Threat of New Entrants
Substitutes Threat of Substitute
Products
Buyers Threat of Buyers’ Growing
Bargaining Power
Suppliers Threat of Suppliers/ Growing
Bargaining Power
54
Evaluating and Selecting the
Market Segments
55
Evaluating &
Selecting the
Market
Segments
56
Possible Levels of Segmentation
57
- A firm attempts to serve
Evaluating & all customer groups with
Selecting the all the products they
Market might need. Most
Segments applicable to large firms.
58
Undifferentiated Marketing-
the firm ignores segment
differences and goes after the
whole market with one offer
Evaluating &
Selecting the Differentiated Marketing -
Market operates in several market
Segments segments and designs
different products for each
segment
59
- Selective Specialization-
Evaluating &
Selecting the selects a subset of all the
Market possible segments, each
Segments attractive and appropriate
60
- Product Specialization- a
Evaluating &
Selecting the firm sells a certain product
Market to several different market
Segments segments
61
- Market Specialization-
Evaluating &
Selecting the concentrates on serving
Market many needs of a particular
Segments customer group.
62
- The firm markets to only one
particular segment
Evaluating &
Selecting the - Enjoys operating economies
Market through specializing its
Segments production, distribution and
promotion
63
- Also known as one-to-one
marketing
Evaluating & - Ultimate level of segmentation
Selecting the which leads to “segments of
Market one”, “ customized marketing”
Segments - This represents a target of one
individual for whom a unique
product offering is developed.
64
◦ Identify your prospects and
one-to-one customers.
marketing ◦ Differentiate customers in
steps terms of their needs and their
value to your company.
65
◦ Interact with customers to
improve your knowledge
one-to-one about their needs and build
marketing stronger relationships.
steps ◦ Customize products, services,
and messages to each
customer.
66
The Zozosuit
67
Legal & Ethical Public becomes concerned when
Issue with marketers take unfair advantage
of vulnerable groups (children) or
Market Targets
disadvantaged groups.
68
Kretek Cigarettes in Fast-food Marketing Effort for
Indonesia Children
69
POSITIONING
70
Creating, communicating, and
delivering the value offering to the
POSITIONING target markets so that consumers
understand its ability to fulfill their
needs and wants
71
- Show consumer perceptions
of their brands versus
competing products on
important buying dimensions
Perceptual
Maps - Perceptual maps can help
identify where (in the market)
an organization could position
a new brand
72
73
Three Steps in Positioning Task
1. Identifying a set of possible customer value
differences that provide competitive
advantages upon which to build a position.
75
Sources of
Differentiation
76
Sources of
Differentiation
77
Selecting Overall Positioning
Strategy
Value Proposition – full positioning of a
brand and the full mix of benefits upon
which the brand is differentiated and
positioned
78
Positioning
Strategies
79
More for More
80
More for the Same
81
The Same for Less
82
Less for Much Less
84
Positioning
Errors
85
Underpositioning
86
Overpositioning
87
Confused Positioning
88
Doubtful Positioning
89
Communicating and Delivering The
Chosen Position
90
References
● Kotler, P., Keller, K., Ang, S., Tan, C., & Leong, S. (2018).
Marketing Management An Asian Perspective (7th
ed., pp. 248-271).
● Kotler, P., Armstrong, G., Ang, S., Leong, S., Tan, C., &
Yau, O. (2009). Principles of Marketing A Global
Perspective (12th ed., pp. 164-182). Pearson Education,
Inc.
92
“
Market Segmentation is a
natural result of the vast
differences among people.
-Donald Norman
93