Presentation on Identifying Market
Segments and Targets
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WHY SEGMENT MARKETS?
• What Market Segmentation Means
 Market segments
 Product differentiation
• Segmentation: Linking Needs to Action
Market segmentation links market needs to an
organization’s marketing program
WHY SEGMENT MARKETS?
• What Market Segmentation Means
(cont)
• How Reebok’s Segmentation Strategy
Developed
Reebok market-product grid showing how different
shoes reach segments of customers with different
needs
WHY SEGMENT MARKETS?
• What Market Segmentation Means
• Using Market-Product Grids
WHY SEGMENT MARKETS?
• When to Segment Markets
• One Product and Multiple Market Segments
• Multiple Products and Multiple Market
Segments
• Segments of One: Mass Customization
• The Segmentation Trade Off: CRM versus
synergies
STEPS IN SEGMENTING
AND TARGETING MARKETS
STEPS IN SEGMENTING
AND TARGETING MARKETS
• Form Prospective Buyers into Segments
• Criteria to Use in Forming the Segments
 Potential for increased profit and ROI
 Similarity of needs of potential buyers in a segment
 Difference of needs of buyers among segments
 Feasibility of a marketing action reaching segment
 Simplicity and cost of assigning buyers to markets
Segmentation
variables and
breakdowns for
U.S. consumer
markets
STEPS IN SEGMENTING
AND TARGETING MARKETS
 Ways to Segment Consumer Markets
 Usage rate
 80/20 rule
Comparison of various kinds of users and nonusers for Wendy’s,
Burger King, and McDonald’s restaurants
Fast-Food Patronage:
Simmons Fall 2001 National Consumer Survey
Segmentation variables and
breakdowns for U.S. organizational markets
STEPS IN SEGMENTING
AND TARGETING MARKETS
• Form Products to Be Sold into Groups
• Develop a Market-Product Grid and
Estimate Size of Markets
STEPS IN SEGMENTING
AND TARGETING MARKETS
• Select Target Markets
• Criteria to Use in Picking the Target
Segments
 Market size
 Expected growth
 Competitive position
 Cost of reaching the segment
 Compatibility with objectives and resources
• Choose the Segments
STEPS IN SEGMENTING
AND TARGETING MARKETS
• Take Marketing Actions to Reach Target
Markets
POSITIONING THE PRODUCT
• Two Approaches to Product Positioning
 Head-to-head positioning
 Differentiation positioning
POSITIONING THE PRODUCT
• Product Positioning Using Perceptual
Maps
 Evaluations of important attributes for a
product class
 Judgments of existing brands with the
important attributes
 Ratings of an ideal brand’s attributes