MARKET SEGMENTATION

Target Marketing Process

Identify markets with unfulfilled needs

Determining Market Segmentation

Selecting Market to Target

Positioning through Marketing Strategies

Target Marketing Process

The process by which marketers develop different marketing strategies to satisfy different customer needs

Identify markets with unfulfilled needs this isolates

consumers with similar lifestyles, needs, and wants to find a common ground to more effectively provide them with products/services Market Segmentation dividing a market into distinct groups that have common needs and will respond similarly to a marketing action. Selecting a market to target determining how many segments to enter and which segments offer the most potential. Positioning defined as the art and science of fitting the product or service to one or more segments of the broad market in such a way as to set it meaningful apart from competition.

Mass Marketing

A marketing strategy wherein a seller engages in mass production, mass distribution, and mass promotion of one product for all buyers.

Levels of Market Segmentation

1.

Segment Marketing
A market segment consists of a large identifiable group within a market with similar wants, purchasing power, geographical location, buying attitudes, or buying habits. e.g. Air Lines (economy, first class, business) Bus Company (regular, aircon, business) Soap (Camay, Safeguard, Ivory)

Levels of Market Segmentation

2.

Niche Marketing

A more narrowly defined group, typically a small market whose needs are not well served; fairly small and normally attract one or two segments e.g. Magazines (Inquirer Golf, C! Magazine, Mens
Health)

Luxury Car

(Porsche, Jaguar, Ferrari)

Levels of Market Segmentation

3.

Local Marketing

Tailored to the needs and wants of local customer groups (trading areas, neighborhoods,
even individual stores)

e.g. Rural Bank, Cooperative for farmers and fishermen (in the province)

4.

Individual Marketing

One-to-one marketing or mass customization (ability to prepare on a mass basis

individually designed products & communications to meet each customers requirements.)

Bases for Segmenting Consumer Markets

Psychographic Demographic

Customer Characteristics
Socioeconomic Geographic

Behavior

Outlets

Usage

Buying Situation
Awareness Benefits

Bases for Segmenting Consumer Markets (Consumer Characteristics)

A.

Geographic Segmentation
Dividing the market into different geographic units such as nations, regions, cities, towns, neighborhoods

Region City or Metro Size - populated Density urban, rural Climate

Most popular bases for distinguishing customer groups

Bases for Segmenting Consumer Markets (Consumer Characteristics)

B.

Demographic Segmentation
Dividing the market on the basis of demographic variables
Age Gender (clothing, hairstyling, cosmetics, and
magazines)

Religion Race Generation Nationality Residence Tenure Marital Status

Bases for Segmenting Consumer Markets (Consumer Characteristics)

C.

Socioeconomic Segmentation
Dividing the market on the basis of socioeconomic variables

Income Social Class (cars, clothing, home furnishings, leisure, reading habits, etc.) Occupation Education

Population by Income Class

1.4 2 26.4
D Market C2 Market E Market AB Market C1 Market

13.2

56.9

PhP50,001 & up PhP 15,001 to 30,000 PhP Under 8,001

PhP30,001 to 50,000 PhP 8,001 to 15,000

Bases for Segmenting Consumer Markets (Consumer Characteristics)

D.

Psychographic Segmentation
Science of measuring and categorizing consumer lifestyles
Lifestyle persons pattern of living in the world as expressed in activities, interests, and opinions; portrays the whole person interacting with his environment Personality distinguishing psychological characteristics that lead to relatively consistent and enduring responses to environment

Bases for Segmenting Consumer Markets (Buying Situations)

E.

Behavioral Segmentation
Dividing buyers into groups based on their usage, loyalties, buying responses, knowledge of, attitude toward a product. Outlets department stores, malls, wet market Occasions buyers can be distinguished based on
or use a product.

the occasions they develop a need, purchase a product,

Bases for Segmenting Consumer Markets (Buying Situations)

E.

Behavioral Segmentation
Benefits
Buyers can be classified based on the
benefits they seek.

User Status Usage Rate Attitude

Markets can be segmented into nonusers, ex-users, potential users, first-time users, and regular users of a product. Markets can be segmented into

light, medium, and heavy product users.

Bases for Segmenting Consumer Markets (Buying Situations)

E.

Behavioral Segmentation
Buyer-Readiness Stage
to buy a product

stages of readiness

Aware of the product Unaware of the product Informed Interested Some desire the product Some intend to buy

Bases for Segmenting Consumer Markets (Buying Situations)

E.

Behavioral Segmentation
Loyal Status degrees of loyalty to specific brands, stores, and other entities.

Hard-core loyals 1 brand Split loyals 2 or 3 Shifting loyals Switchers - no loyalty

Market Targeting

Evaluating Market Segments Selecting Market Segments

Single-Segment Concentration Selective Specialization Product Specialization Market Specialization Full Market Coverage

CUSTOMER VALUE, SATISFACTION, RETENTION and MANAGEMENT

Customer Value

Total Customer Value Total Customer Cost

bundle of benefits customers expect from a given product or service. bundle of costs customers expect to incur in evaluating, obtaining, using, and disposing of the product or service.

Customer Delivered Value difference

between total customer value and total customer cost.

Customer Value The Value Chain

Value Chain

tool or set of value-creating activities that enhance customer value

Inbound logistics Operations Outbound logistics Marketing Service Procurement Technology department Human resource management Firm infrastracture

Customer Satisfaction

Satisfaction

is a persons feelings of pleasure or disappointment resulting from comparing a products perceived performance in relation to expectations.

Total Customer Satisfaction

satisfaction

100%

Customer Satisfaction
4 Methods to tract Customer Satisfaction

Complaint and Suggestion systems Customer Satisfaction Surveys Ghost Shopping Lost Customer Analysis

Attracting and Retaining Customers

The key to retention is satisfaction! A satisfied customer:

Stays longer Buys more as the company introduces new products and upgrades existing products Talks favorably about the company and its products Pays less attention to competing brands and advertising; less sensitive to price offers product or service ideas to the company Costs less to serve than new customers

Relationship Marketing
5 Levels of Investment in building Customer Relationship

Basic Marketing Reactive Marketing Accountable Marketing Proactive Marketing Partnership Marketing

Relationship Marketing

3 Value-building Tools

Adding Financial Benefits

Adding Social Benefits

Frequency Marketing Programs FMP

Increasing social bonds with customers by personalizing customer relationship e.g. initiate positive phone calls, show appreciation, get to problems, accept responsibility

Adding Structural Ties

Providing customers with special equipment or computer linkages