CHAPTER
IDENTIFYING
MARKET SEGMENTS
AND TARGETS
Dr. Hurrem Yilmaz
 Market Segmentation
Market segmentation links market needs to
an organization’s marketing program
Dr. Hurrem Yilmaz
Four levels of Micromarketing
Segments
Niches
Local areas
Individuals
Dr. Hurrem Yilmaz
Niche Marketers :
Guerillas against Gorillas
Enterprise Rent-A-Car
targets the insurancereplacement market
Dr. Hurrem Yilmaz
Baskin Robbins focuses on
Local Marketing and stopped advertising in 2004 to
focus on “three-mile marketing”
Dr. Hurrem Yilmaz
Ways to segment markets
• Geographical segmentation
• Demographic segmentation
– Most popular segmentation
• Psychographic segmentation
– Lifestyle, social class, and personality-based
segmentation
• Behavioral segmentation
Goal 2: List and discussDr.major
bases for segmentation
Hurrem Yilmaz
Geographic Segmentation Variables
• World region
or country
• U.S. region
• State
• City
• Neighborhood
• City or
metro size
• Density
• Climate
Goal 2: List and discussDr.major
bases for segmentation
Hurrem Yilmaz
Demographic
Segmentation Variables
•
•
•
•
•
Age
Gender
Family size
Family life cycle
Income
•
•
•
•
•
•
Occupation
Education
Religion
Race
Generation
Nationality
Goal 2: List and discussDr.major
bases for segmentation
Hurrem Yilmaz
Behavioral Segmentation Variables
• Occasions
• Benefits
• User status
•
•
•
•
User rates
Loyalty status
Readiness stage
Attitude toward the
product
Goal 2: List and discussDr.major
bases for segmentation
Hurrem Yilmaz
Criteria to Use in Forming the Segments
• Measurable
– Size, purchasing power, and profile of
segment
• Accessible
– Can be reached and served
• Substantial
– Large and profitable enough to serve
• Differentiable
– Respond differently
• Actionable
– Effective programs can be developed
Dr. Hurrem Yilmaz
Positioning
– The place the product occupies in consumers’ minds
relative to competing products
– Typically defined by consumers on the basis of important
attributes
– Involves implanting the brand’s unique benefits and
differentiation in the customer mind
– Positioning maps that plot perceptions of brands are
commonly used
Dr. Hurrem Yilmaz
A perceptual map to suggest a strategy for
positioning chocolate milk to reach adults
Dr. Hurrem Yilmaz
Market Segmentation
Market segmentation involves
aggregating prospective into groups
that (1) have common needs and
(2) will respond similarly to a
marketing action.
Dr. Hurrem Yilmaz
Slide 9-64
Product Differentiation
Product differentiation is a strategy
that involves a firm’s using different
marketing mix activities to help
consumers perceive the product as
being different and better than
competing products.
Dr. Hurrem Yilmaz
Slide 9-66
Market-Product Grid
A market-product grid is a framework
to relate the segments of a market to
products offered or potential
marketing actions by the firm.
Dr. Hurrem Yilmaz
Slide 9-67
Usage Rate
The usage rate is the quantity consumed
or patronage during a specific period
of time.
Dr. Hurrem Yilmaz
Slide 9-69
80/20 Rule
The 80/20 rule is a concept that
suggests 80 percent of a firm’s sales
are obtained from 20 percent
of its customers.
Dr. Hurrem Yilmaz
Slide 9-70
Product Positioning
Product positioning refers to the place
an offering occupies in consumers’
minds on important attributes relative
to competitive offerings.
Dr. Hurrem Yilmaz
Slide 9-71
Perceptual Map
A perceptual map is a means of
displaying or graphing in two
dimensions the location of products or
brands in the minds of consumers to
enable a manager to see how
consumers perceive competing
products or brands and then take
marketing actions.
Dr. Hurrem Yilmaz
Slide 9-72