Target Marketing

Mass marketing is no more practiced

Target marketing requires marketers to take three
major steps:

Market segmentation: Identifying and profiling

distinct groups of buyers who differ in their
needs and preferences.
Market targeting: Selecting one or more
market segments to enter.
Market positioning: Establishing and
communicating the key distinctive benefit(s) of
the companys market offering to each target.

Market Segmentation

Micromarketing can be undertaken at four levels:

Segment marketing
Niche marketing
Local marketing
Individual marketing

STP Process
The Segmentation, Targeting and
Positioning

Understand the
Needs
Segment
identification
Segment
attractiveness

Segment
profitability
Segment
positioning
Marketingmix
strategy

Identifying Market
Segments
Survey
Motivations
Attitudes
Behavior
Analysis
Factors
Clusters
Profiling

Basic Market-Preference
Patterns

Sweetness

(c) Clustered
preferences

Creaminess

(b) Diffused
preferences

Creaminess

Creaminess

(a) Homogeneous
preferences

Sweetness

Sweetness

Effective Segmentation
Measurable
Measurable
Accessible
Accessible
Substantial
Substantial

Size, purchasing power,

profiles of segments can
be measured.
Segments can be
effectively reached and
served.
Segments must be large or
profitable enough to serve.

Differential
Differential

Segments must respond

differently to
different marketing mix
elements & actions.

Actionable
Actionable

Must be able to attract and

serve
the segments.

Bases for Segmenting

Consumer Markets
Geographic
Region, City or Metro
Size, Density, Climate

Demographic
Age, Gender, Family size
and life cycle, Race,
Occupation, or Income ...

Psychographic
Lifestyle or Personality

Behavioral
Occasions, Benefits,
User status, or
Attitudes

Bases for Segmenting

Business Markets

Demographic

Industry, company size, location

Operating Variables

Technology level

Purchasing Approaches

Purchasing policy, centralized/decentralized

Situational Factors

Size of order, urgency

Personal Characteristics

Loyalty, attitude toward risk

Steps in Market
Segmentation, Targeting,and
Positioning
Market
Market
Market

Segmentation
1. Identify
segmentation
variables and
segment the
market
2. Develop
profiles of
resulting
segments

Targeting

3. Evaluate
attractiveness
of each
segment
4. Select the
target
segment(s)

Positioning

5. Identify
possible
positioning
concepts for
each target
segment
6. Select,
develop, and
communicate
the chosen
positioning
concept

Five Patterns of Target

Market Selection
Single-segment
concentration

Product
specialization

Selective
specialization

M1 M2 M3

M1 M2 M3

M1 M2 M3

P1

P1

P1

P2

P2

P2

P3

P3

P3
Market
specialization

Full market
coverage

M1 M2 M3
P = Product
M = Market

M1 M2 M3

P1

P1

P2

P2

P3

P3

Segment-by-Segment
Invasion Plan
Customer Groups

Product Varieties

Airlines

Railroads

Truckers

Large
computers
Mid-size
computers
Personal
computers

Company A

Company B

Company C