MARKETING MANAGEMENT
12th edition
8
Identifying Market
Segments and
Targets
Kotler
Keller
Chapter Questions
• What are the different levels of market
segmentation?
• How can a company divide a market into
segments?
• How should a company choose the most
attractive target markets?
• What are the requirements for effective
segmentation?
8-2
Mature
consumers
are a rapidly
growing market
8-3
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.
8-4
Ford’s Model T Followed a Mass
Market Approach
8-5
Four levels of Micromarketing
Segments
Niches
Local areas
Individuals
8-6
Segment Marketing
Targeting a group of customers
who share a similar set of
needs and wants.
8-7
Flexible Marketing Offerings
• Naked solution
– Product and service
elements that all
segment members
value
• Discretionary options
– Some segment
members value
– Options may carry
additional charges
8-8
Figure 8.1 Basic Market Preference Patterns
8-9
Niche Marketers
Enterprise Rent-a-Car
targets the insurancereplacement market
8-10
Niche Marketers: Tom’s
8-11
The Experience Economy
Experience
Services
Goods
Commodity
8-12
Customerization
Combines operationally driven
mass customization with customized
marketing in a way that empowers
consumers to design the
product and service offering
of their choice.
8-13
Figure 8.2 Examples of Market
Customization
8-14
Segmenting Consumer Markets
Geographic
Demographic
Psychographic
Behavioral
8-15
Claritas’ Prizm
8-16
Demographic Segmentation
Age and Life Cycle
Life Stage
Gender
Income
Generation
Social Class
8-17
Toyota Scion targets Gen Y
consumers
8-18
Figure 8.3
Profiling American Generations
• GI Generation
– 1901-1924
• Silent Generation
– 1925-1945
• Baby Boomers
– 1946-1964
• Generation X
– 1965-1977
• Generation Y
– 1978-1994
• Millenials
– 1995-2002
8-19
Figure 8.4
The VALS
Segmentation
System
8-20
Behavioral Segmentation
Decision Roles
• Initiator
• Influencer
• Decider
• Buyer
• User
Behavioral Variables
• Occasions
• Benefits
• User Status
• Usage Rate
• Buyer-Readiness
• Loyalty Status
• Attitude
8-21
Mobil’s 5 Customer Segments
Road Warriors
Price Shoppers
Gen F
Home Bodies
True Blues
8-22
Loyalty Status
Hard-core
Split loyals
Shifting loyals
Switchers
8-23
The Conversion Model
Convertible
Shallow
Users
Strongly
unavailable
Weakly
unavailable
Average
Entrenched
Nonusers
Ambivalent
Available
8-24
Figure 8.5 Behavioral
Segmentation Breakdown
8-25
Segmenting for Business Markets
Demographic
Operating Variable
Purchasing Approaches
Situational Factors
Personal
Characteristics
8-26
BB&T Bank’s
B-to-B
advertising
8-27
Nextel
8-28
Models of Sequential Segmentation
Stage of decision
• First-time
prospects
• Novices
• Sophisticates
Orientation
• Price-oriented
• Solution-oriented
• Strategic-value
8-29
Steps in Segmentation Process
Needs-based segmentation
Segment identification
Segment attractiveness
Marketing-Mix
Strategy
Segment profitability
Segment positioning
Segment acid test
8-30
Figure 8.6 Patterns of Target Market Selection
8-31
Figure 8.6 Patterns of Target Market Selection
8-32
Figure 8.6 Patterns of Target Market Selection
8-33
Effective Segmentation Criteria
Measurable
Substantial
Accessible
Differentiable
Actionable
8-34
Figure 8.7 Segment-by-Segment
Invasion Plan
8-35
Pepsi used megamarketing in India
8-36
Marketing Debate
 Is mass marketing dead?
Take a position:
1. Mass marketing is dead.
2. Mass marketing is still a viable way
to build a profitable brand.
8-37
Marketing Discussion
 How would you classify yourself in
terms of the various segmentation
schemes?
8-38