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Target Market & Segmentation
Transcript of Target Market & Segmentation
Market segmentation reveals the firm's market segment opportunities
The concept of targeting all segments of a market with the same marketing strategy.
Kyron, Corbin, Kendra, & Dave
A firm must look at 3 factors when evaluating different market segments
1)Segment size and growth
2)Segment structural attractiveness
3)Company objectives and resources
1. Segment Size & Growth
large, fast-growing segments are attractive, yet
small segments may lack resources & skills
small segments may be less attractive, yet profitable
2. Segment Structural Attractiveness
Number of competitors
Aggressiveness of competitors
Substitute products->limit prices & profits
Buyers with strong bargaining power relative to sellers
effect prices, services, and competitors
can control prices, ordered goods, and services
The process of grouping customers within a market according to similar needs, habits or attitudes that can be addressed through marketing
Four Main Segmentation Variables:
Having the product or service set in the target customers mind compared to other products
Based off target market you are trying to reach
Allows goods and services to be differentiated and helps consumers make choices
2 Elements of Positioning
Physical attributes- the functionality and capability of a brand
Communication and perception- how the product is communicated to the consumer and how the consumer perceives its value
3. Company Objectives & Resources
Segments can be dismissed because they do not mesh with company's long run objectives
-Attributes or benefits
-Use or application
-Product or brand user
-Product or service class
Must position brand over the competition through different:
After evaluating different segments...TARGET!
What is a Target Market?
Set of buyers sharing common needs or characteristics that the company decides to serve
Market Targeting can be carried out in various ways
Differentiated (segmented marketing)-- several segments, separate offers
Concentrated (niche marketing)--small segments, strong marketing positioning, pros/cons
Micromarketing (differentiated & concentrated marketing)
Now for our TARGET EXAMPLE
How could your groups product or service be positioned successfully in the target customers mind?
Targeting multiple segments of a market with a specific marketing strategy for each segment. It targets an immensely diverse group of segments with individual marketing mixes
1.) Considerable research to understand each segments needs
2.) Higher costs for different products, different advertising campaigns.
3.) Costs that have to be taken into account when preparing marketing plans and related budgets.
If resources won’t stretch to cover all the targeted segments, may have to consider a roll out strategy for entering each segment one at a time, in order of priority.
Can differentiate products & brands in different ways.
1.)Physical attributes like product features.
2.) Service attributes like quick installation and prompt service.
3.) Pricing attributes like bargain pricing.
Product differentiating depends on what customer’s value and how competitors are perceived.
Perceived differences can involve physical features or non-physical ones such as image or price.
In a narrower sense it can involve firm selling two or more products with different features targeted to different market segments
1.)Mass marketing approach that ignores any segment differences.
2.)Based on the assumption that the same strategy will yield the same results for all market segments.
3.)Requires less investment in product development, research and other areas.
4.)Seldom seen now a days.
Differentiated Market (segmented marketing)
Women 18-30 years old
Like classy underwear
What do you remember?