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8
Identifying Market
Segments and Targets
Fords Model T Followed a Mass
Market Approach
 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
What is a Market Segment?

A market segment consists of a group

of customers who share a similar set of
needs and wants.
Segmenting Consumer Markets

Geographic

Demographic

Psychographic

Behavioral
Demographic Segmentation

Age and Life Cycle

Life Stage
Gender
Income
Generation
Social Class
Race & Culture
Behavioral Segmentation Based
on Needs and Benefits
Enthusiast
Image Seeker
Savvy Shoppers
Traditionalist
Satisfied Sippers
Overwhelmed
Behavioral Segmentation:
Behavioral Variables

Occasions Buyer-Readiness
Loyalty Status
Benefits
Attitude
User Status
Usage Rate
 Heavy and Light Users of Common
Consumer Products
PRODUCT (% USERS) HEAVY HALF LIGHT HALF
Soups and
detergents (94%) 75% 25%
Toilet tissue (95%) 71% 29%
Shampoo (94%) 79% 21%
Paper towels (90%) 75% 25%
Cake mix (74%) 83% 17%
Cola (67%) 83% 17%
Beer (41%) 87% 13%
Dog food (30%) 81% 19%
Bourbon (20%) 95% 5%
The Brand Funnel Illustrates
Variations in the
Buyer-Readiness Stage
Aware
Ever tried
Recent trial
Occasional user
Regular user
Most often used
 Loyalty Status

Hard-core
Split loyals
Shifting loyals
Switchers
Figure 8.3 Behavioral
Segmentation Breakdown
Effective Segmentation Criteria

Measurable

Substantial

Accessible

Differentiable

Actionable
Porters Five Forces Model
Figure 8.4 Possible Levels
of Segmentation