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Identifying Market Segments and Targets

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Song Vichay

on 22 March 2014

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Transcript of Identifying Market Segments and Targets

II. Market Targeting
There are many statistical techniques for developing market segments. 53 Once the firm has identified its market-segment opportunities, it must decide how many and which ones to target
c. Psychographic Segmentation
is the science of using psychology and demographics to better understand consumers. In psychographic segmentation, buyers are divided into different groups on the basis of psychological/personality traits, lifestyle, or values
b. Evaluating and Selecting the Market Segments
In evaluating different market segments, the firm must look at two factors: the segment’s overall attractiveness and the company’s objectives and resources. Marketers have a range or continuum of possible levels of segmentation that can guide their target market decisions.
Marketers must choose target markets in a socially responsible manner at all times.
Identifying Market Segments and Targets
I. Bases for Segmenting Consumer Markets
a. Geographic Segmentation
b. Demographic Segmentation
c. Psychographic Segmentation
d. Behavioral Segmentation
II. Market Targeting
a. Effective Segmentation Criteria
b. Evaluating and Selecting the Market Segments

Chapter 8
I. Bases for Segmenting Consumer Markets
Market segmentation divides a market into well-defined slices. A market segment consists of a group of customers who share a similar set of needs and wants.

a. Geographic Segmentation
Geographic segmentation divides the market into geographical units such as nations, states, regions, counties, cities, or neighborhoods.
b. Demographic Segmentation
In demographic segmentation, we divide the market on variables such as age, family size, family life cycle, gender, income, occupation, education, religion, generation, nationality, and social class.
Consumer wants and abilities change with age. Toothpaste brands such as Crest and Colgate offer three main lines of products to target kids, adults, and older consumers
Men and women have different attitudes and behave differently, based partly on genetic makeup and partly on socialization
Income segmentation is a long-standing practice in such categories as automobiles, clothing, cosmetics, financial services, and travel. However, income does not always predict the best customers for a given product
Each generation or cohort is profoundly influenced by the times in which it grows up—the music, movies, politics, and defining events of that period
an approach recognizing that different ethnic and cultural segments have sufficiently different needs and wants to require targeted marketing activities, and that a mass market approach is not refined enough for the diversity of the marketplace
d. Behavioral Segmentation
In behavioral segmentation, marketers divide buyers into groups on the basis of their knowledge of, attitude toward, use of, or response to a product
Not everyone who buys a product has the same needs or wants the same benefits from it. Needs-based or benefit-based segmentation is a widely used approach because it identifies distinct market segments with clear marketing implications.
It’s easy to identify the buyer for many products. In the United States, men normally choose their shaving equipment and women choose their pantyhose; but even here marketers must be careful in making targeting decisions, because buying roles change
Many marketers believe variables related to various aspects of users or their usage—occasions, user status, usage rate, buyer-readiness stage, and loyalty status—are good starting points for constructing market segments
a. Effective Segmentation Criteria
Not all segmentation schemes are useful. We could divide buyers of table salt into blond and brunette customers, but hair color is undoubtedly irrelevant to the purchase of salt. Furthermore, if all salt buyers buy the same amount of salt each month, believe all salt is the same, and would pay only one price for salt, this market is minimally segment able from a marketing point of view. To be useful, market segments must rate favorably on five key criteria:
The size, purchasing power, and characteristics of the segments can be measured
The segments are large and profitable enough to serve. A segment should be the largest possible homogeneous group worth going after with a tailored marketing program. It would not pay, for example, for an automobile manufacturer to develop cars for people who are less than four feet tall

The segments can be effectively reached and served
The segments are conceptually distinguishable and respond differently to different marketing-mix elements and programs. If married and unmarried women respond similarly to a sale on perfume, they do not constitute separate segments.
Effective programs can be formulated for attracting and serving the segments
With full market coverage, a firm attempts to serve all customer groups with all the products they might need.
With selective specialization, a firm selects a subset of all the possible segments, each objectively attractive and appropriate
With single-segment concentration, the firm markets to only one particular segment
The ultimate level of segmentation leads to “segments of one,” “customized marketing,” or “one-to-one marketing
Group Members
Mass Market
Thank you for watching

Song Vichay
Lok Sievfong
David Leaksmey
Sarith Sreyleak
Full transcript