Maryam University

Bachelor of Business Administration

Department of Business Administration

Subject: Strategic Management

Lecture# Seventh
Lecturer: Attaullah Hazrat

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Outline of the lecture
Topic 1: Market segmentation
Topic 2: Mass marketing
Topic 4: Target marketing
Topic 5: Bases for segmentation
Topic 6: Marketing mix

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Objectives of the lecture
After completion of this lecture students will be able to know:

 Market segmentation and target market,

 Market segmentation Link with strategy implementation

 Marketing Mix

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Implementing Strategies:
Marketing
Market segmentation

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Market segmentation

o Market segmentation is the process of grouping a market (i.e. customers) into

smaller subgroups.

o These segments are homogeneous within (i.e. people in the segment are similar
to each other in their attitudes about certain variables).

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The Need for Market Segmentation

o The marketing concept calls for understanding customers and satisfying their
needs better than the competition.

o Different customers have different needs, wants and demand.

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Mass marketing

o Mass marketing refers to treatment of the market as a homogenous group and

offering the same marketing mix to all customers.

o Mass marketing allows economies of scale to be realized through mass

production, mass distribution, and mass communication.

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Target marketing

o Homogeneity within the segment.

o Heterogeneity between segments.

o Segments are measurable and identifiable.

o Segments are accessible and actionable.

o Segment is large enough to be profitable.

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Bases for Segmentation in Consumer Markets

a) Geographic Segmentation
b) Demographic Segmentation
c) Psychographic Segmentation
d) Behavioristic Segmentation

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a) Geographic Segmentation

• Region: by continent, country, state, or even neighborhood.

• Size of metropolitan area: segmented according to size of population.

• Population density: often classified as urban, suburban, or rural.

• Climate: according to weather patterns common to certain geographic regions.

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b) Demographic Segmentation

• Age
• Gender
• Income
• Occupation
• Education
• Ethnicity
• Nationality
• Family size, lifecycle
• Generation: baby-boomers, Generation X, etc.
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c) Psychographic Segmentation

o Activities

o Interests

o Opinions

o Attitudes

o Values

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d) Behavioristic Segmentation

• Benefits sought
• Usage rate
• Brand loyalty
• Readiness to buy
• User status: potential, first-time, regular, etc.
• Occasions: holidays and events that stimulate purchases

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 Market segmentation Link with strategy implementation

Market segmentation is an important variable in strategy implementation for at

least three major reasons.
o First, strategies such as market development, product development, market
penetration, and diversification require increased sales through new markets and
products.

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Con…
o Second, market segmentation allows a firm to operate with limited resources
because mass production, mass distribution, and mass advertising are not
required.

o Third, market segmentation decisions directly affect marketing mix variables:

product, price, place and promotion.

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Marketing Mix

Marketing Mix is now being introduced as the Four Ps.

Product is whatever it may be that is being sold/marketed.

Price refers to not only the actual price but also price elasticity.

Place has evidently replaced distribution simply by where or what area the marketing
campaign is going to cover.

Promotion simply refers to what media/medium vehicle will deliver the message and
what the overall marketing strategy(s) is offering as a benefit.

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a) Product Decisions

• Brand name
• Functionality
• Styling
• Quality
• Safety
• Packaging
• Repairs and Support
• Warranty
• Accessories and services

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 b) Price Decisions

• Pricing strategy (skim, penetration, etc.)

• Suggested retail price

• Volume discounts and wholesale pricing

• Cash and early payment discounts

• Seasonal pricing

• Bundling

• Price flexibility

• Price discrimination

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c) Distribution (place) Decisions

• Distribution channels

• Specific channel members

• Inventory management

• Warehousing

• Distribution centers

• Order processing

• Transportation

• Market coverage (inclusive, selective, or exclusive distribution)

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d) Promotion Decisions

• Promotional strategy (push, pull, etc.)

• Advertising

• Personal selling & sales force

• Sales promotions

• Public relations & publicity

• Marketing communications budget

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Conclusion

o The marketing concept calls for understanding customers and satisfying their
needs better than the competition.

o Market segmentation is the process of grouping a market into smaller

subgroups.

o Marketing Mix is now being introduced as the Four Ps.

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References
1. Strategic Management Concepts and Cases Sixteen Edition by Fred R.
David, 11th Edition.

2. Fundamental of Business Management Process by Marlon Dumas and Jan

Mandelling.

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