Chapter 9
Identifying
Market
Segments and
Selecting Target
Markets
PowerPoint by Yu Hongyan
Business of Jilin University
Marketing Strategy Planning Process Highlights Opportunities
External Market Environment
© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Objectives
9.1 Level of Segmentation
9.2 Market Segmentation Process
9.3 Segmenting Consumer Markets
9.4 Target Market Strategy
9.1 Level of Segmentation
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Segment marketing
Nich marketing
Local marketing
Individual marketing
9.1 level of Segment (cont’d)
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Mass marketing
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The seller engages in the mass production,
mass distribution, and mass promotion of one
product for all buyers
Example:Milk power
We call that one size fits all
Mass marketing is dying
9.1 level of Segment (cont’d)
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Segment marketing
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Concept
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consists of a large identifiable group within a market with
similar wants, purchasing power, geographical location,
buying attitudes, or buying habits
Segmentation is an approach midway between
Advantage
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Fine product and price for the target market
Distribution and communication channels
Fewer competitors in the particular segment
9.1 level of Segment (cont’d)
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Nich marketing
Concept
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A niche is a more narrowly defined group, typically a
small market whose needs are not well serve
Tea Bar, expensive Inn
Nich are small and normally attract only one or
two
Nich marketers understand their customers
needs so well that the customer pay high money
细分
休闲型
海滩，度假村
冒险型
旅游
登山，攀
岩
补缺
知识型
古迹，名
胜
9.1 level of Segment (cont’d)
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Local Marketing
Needs and want of local customer group
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Trade area
Neighborhoods
Local culture and life style
9.2 Market-Segmentation Process
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Step in Segmentation Process
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Needs-Based Segmentation
Segment identification
Segment attractiveness
Segment profitability
Segment positioning
Segment “acid Test “
Marketing mix strategy page 174
9.2 Market Segmentation Process (cont’d)
了解市场基本情况
确定基础变量
收集数据
分析数据
构建细分市场
描述细分市场
命名细分市场
选择细分市场
9.2 Market Segmentation Process (cont’d)
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Video the segmentation
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Nike 2 3 4 5 6 7 8 9
McDonalds McDonalds
Millen Times Millen Times
移动通信市场细分
9.2 Market Segmentation Process (cont’d)
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.
9.2 Market Segmentation Process (cont’d)
Discussion Scenario
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A company has chosen to segment the market for Mr.
Microphone into two groups: introverts and extraverts.
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Evaluate these segments.
How well do they exhibit the characteristics of effective
segments previously discussed?
How else could the market be segmented for this product?
9.3 Segmenting Consumer
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
Multiattribute
????
Occasions, Benefits,
Uses, or Attitudes
9.3 Segmenting Consumer (cont’d)
Bases for
Segmentation
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Geographic
Demographic
Psychographic
Behavioral
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Nation or country
State or region
City or metro size
Density
Climate
9.3 Segmenting Consumer (cont’d)
Bases for
Segmentation
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Geographic
Demographic
Psychographic
Behavioral
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Age, race, gender
Income, education
Family size
Family life cycle
Occupation
Religion, nationality
Generation
Social class
9.3 Segmenting Consumer (cont’d)
Bases for
Segmentation
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Lifestyle
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Geographic
Demographic
Psychographic
Behavioral
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Activities
Interests
Opinions
Personality
Core values
9.3 Segmenting Consumer (cont’d)
Bases for
Segmentation
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Geographic
Demographic
Psychographic
Behavioral
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Occasions
Benefits
User status
Usage rate
Loyalty status
Buyer-readiness
Attitude
9.3 Segmenting Consumer (cont’d)
Discussion Scenario
 Multiple criteria are often used in market
segmentation.
Which segmentation bases and variables would
you use when segmenting the consumer market
for cell phone? For businesses?
9.3 Segmenting Consumer (cont’d)
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Multi-attribute segmentation via geoclustering
combines multiple variables to identify smaller,
better-defined target groups
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PRIZM Geoclustering system uses demographic,
geographic, lifestyle, and behavioral characteristics
9.3 Segmenting Consumer (cont’d)
Which PRIZM
clusters
characterize
your zip code?
Find out at
Claritas’ “You
are where you
live” web site.
Competitive Markets
Bases for Business Segmentation
Situational
factors
Operating
variables
Purchasing
approaches
Performance
Analysis
Tools
Personal
characteristics
Demographic variables
Page 180
9.4 Market Targeting Strategies
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Evaluating market segment
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The segment’s overall attractiveness
Size, growth, profitability,
 Scale economics,low risk
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The company’s objectives and resources
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Objective match the resources
Selecting and entering market segment
9.4 Market Targeting Strategies (cont’d)
Segment
Attractiveness
Segment size
Growth rate
Profit margin
Shift of purchase
Business worth
Corporate Objectives
and Strengths
Consideration
of all
combinations
Determination of
the best fit of A & S
Choice of Segment
Corporate objectives
Skills
Resources
Competence
Superior advantages
9.4 Market Targeting Strategies (cont’d)
Five Patterns of Target Market Selection
Single-segment
concentration
Product
specialization
Selective
specialization
M1 M2 M3
M1 M2 M3
M1 M2 M3
P1
P1
P1
P2
P2
P2
P3
P3
P3
Market
specialization
Full market
coverage
M1 M2 M3
P = Product
M = Market
M1 M2 M3
P1
P1
P2
P2
P3
P3
9.4 Market Targeting Strategies
(cont’d)
Figure 9-2: Five Patterns of Target Market Selection
Three Alternative Market-Coverage
Strategies
Undifferentiated
Marketing
Differentiate
d Marketing
Concentrated
Marketing
(Market Niching)
Marketing mix
Market
Marketing mix 1
Segment 1
Marketing mix 2
Segment 2
Marketing mix 3
Segment 3
Segment 1
Marketing mix
Segment 2
Segment 3
Review
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Level of Segmentation
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Market Segmentation Process
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7 steps
Segmenting Consumer Markets
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Mass, Segmentation, Local, Nich and Individual
Geographic, demographic, psychographics, and
behavioral variable
Target Market Strategy
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Attractive and objectives
Single segment, selective, product specialization,
market specialization and full market coverage
Thank you very much!