Chapter 4
Identifying Market Segments
and Selecting Target Markets
The Learning Objectives



Levels and Patterns of Marketing
Segmentation
Marketing Target
Positioning Strategy
Market Segmentation
Dividing a market into distinct groups of buyers
on the basis of needs,characteristics,or
behavior who might require separate products
or marketing mixes.
Segment Market
A group of consumers who respond in a
similar way to a given set of marketing effort.
Market targeting
The process of evaluating each market
segment’s attractiveness and selecting
one or more segment to enter.
Marketing positioning

Arranging for a product to occupy a
clear,distinctive, and desirable place relative to
competing products in the minds of target
consumers.
Levels of market segmentation



Mass marketing
Segment marketing
Niche marketing
micromarketing


Local marketing
Individual Marketing
Discussion


1. How do you think the relationship between
local marketing and international marketing?
2. How to interpret One –one marketing?
(eg. Del: smart marketing)
Steps in Market Segmentation,
Targeting,and Positioning
Market
Segmentation
1. Identify
segmentation
variables and
segment the
market
2. Develop
profiles of
resulting
segments
Market
Targeting
3. Evaluate
attractiveness
of each
segment
4. Select the
target
segment(s)
Market
Positioning
5. Identify
possible
positioning
concepts for
each target
segment
6. Select,
develop, and
communicate
the chosen
positioning
concept
Basic Market-Preference Patterns
Creaminess
Creaminess
Sweetness
(c) Clustered
preferences
Creaminess
(b) Diffused
preferences
(a) Homogeneous
preferences
Sweetness
Sweetness
Market-Segmentation Procedure
Survey
–
–
–
Motivations
Attitudes
Behavior
Analysis
–
–
Factors
Clusters
Profiling
Segmenting consumer
markets(p252)




Geographic Segmentation
Demographic
Psychographic
Behavioral
Bases for Segmenting
Consumer Markets
Geographic
Region, City or Metro
Size, Density, Climate
Demographic
Age, Gender, Family size
and Fife cycle, Race,
Occupation, or Income ...
Psychographic
Lifestyle or Personality
Behavioral
Occasions, Benefits,
Uses, or Attitudes
Discussion
How to choose the segmenting variables?
 Consider the following products,please list the
segmenting standard for each product and
explain the reasons for them.
1.computer; 2.shampoo; 3. Life insurance;
4.book

Bases for Segmenting Business
Markets





Demographic
Operating Variables
Purchasing Approaches
Situational Factors
Personal Characteristics
Effective Segmentation
Measurable
• Size, purchasing power,
profiles of segments can
be measured.
Substantial
• Segments must be large or
profitable enough to serve.
Accessible
• Segments can be
effectively reached and
served.
Differential
• Segments must respond
differently to different
marketing mix elements &
actions.
Actionable
• Must be able to attract and
serve the segments.
Heavy and Light Users of Common
Consumer Products
PRODUCT (% USERS)
Soups and
detergents (94%)
HEAVY HALF
LIGHT HALF
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%
Additional Segmentation Criteria




Ethical Choice of Market Targets
Segment Interrelationships & Supersegments
Segment-by-Segment Invasion Plans
Intersegment Cooperation
Five Patterns of Target Market Selection
Single-segment
concentration
Product
specialization
Selective
specialization
M1 M2 M3
M1 M2 M3
P1
P1
P1
P2
P2
P2
P3
P3
M1 M2 M3
P3
Market
specialization
Full market
coverage
M1 M2 M3
P = Product
M = Market
M1 M2 M3
P1
P1
P2
P2
P3
P3
2.Market Targeting




Target market
Undifferentiated marketing
Differentiated marketing
Concentrated Marketing
Undifferentiated Marketing

A market-coverage strategy in which a firm
decides to ignore market segment differences
and go after the whole market with one offer.
Differentiated marketing

A market-coverage strategy in which a firm
decides to target several market segments and
designs separate offers for each.
Concentrated marketing

A market-coverage strategy in which a firm
goes after a large share of one or a few
submarkets.
Discussion

How to choose the Target market?
3.Positioning



Product position
Competitive advantage
Value propositioning
Product Position

The way the product is defined by consumers
on important attributes----the place the product
occupies in consumers’ minds relative to
competing product.
The BCG Competitive
Advantage Matrix
Size of the
Advantage
Number of Approaches
to Achieve Advantage
Few
Many
Large
Volume
Specialized
Small
Stalemated
Fragmented
Product Differentiation
Form
Features
Performance
Durability
Reliability
Repairability
Quality
Style
Conformance
Quality
Design
Services Differentiation
Customer
Consulting
Installation
Delivery
Customer Maintenance
Training
& Repair
Miscellaneous
Services
Ordering
Ease
Differentiation


Personnel
Channel
Image Differentiation
Media
Atmosphere
Symbols
Events
Important
Profitable
Distinctive
Differences Worth
Establishing
Affordable
Superior
Preemptive
Positioning is the act of
designing the company’s
offering and image to
occupy a distinctive
place in the the target
market’s mind. P 298
Live shows
Perceptual
Map
Easy to reach
Good food
Fantasy
Exercise
Fun rides
Disneyland
Little waiting
0.8
Educational,
animals
Marineland
0.4
of the
Japanese
Pacific
0.2 Deer Park
0.6
Knott’s
Berry
Farm
-1.6 -1.4 -1.2 -1.0 -0.8 -0.6 -0.4 -0.2
-0.2
Magic
Mountain
1.0
0.2
0.4
0.6 0.8 1.0 1.2 1.4 1.6
-0.4
-0.6
-0.8
Busch
Gardens
Economical
Lion
Country
Safari
Sales & profits ($)
Sales & Profit Life Cycles
Introduction
Growth
Maturity
Time
Decline
Four Introductory
Marketing Strategies
Promotion
High
Low
High
Rapidskimming
strategy
Slowskimming
strategy
Low
Rapidpenetration
strategy
Slowpenetration
strategy
Price
Case study


香港大班月饼
Background