Kotler MM 14 Chapter 8 Identifying Market Segments and Targets

Phillip

Kevin Lane

Kotler • Keller Marketing Management • 14e

Identifying Market Segments and Targets

Discussion Questions 1. What are the different levels of market segmentation? 2. In what ways can a company divide a market into segments?

3. What are the requirements for effective segmentation? 4. How should business markets be segmented? 5. How should a company choose the most attractive target markets? Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

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Target Marketing Requirements 1. Identify and profile distinct groups of buyers (market segmentation). 2. Select one or more market segments to enter (market targeting). 3. For each, establish and communicate benefits of offering (market positioning).

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Bases for Segmenting Consumers

Geographic

Demographic

Psychographic Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Behavioral Slide 5 of 26

Geographic Segmentation

Geoclustering

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Demographic Segmentation Age and Life-cycle Stage Life Stage Gender Income Generation Race and Culture

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Age and Life-Cycle Stage

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Life Stage

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Gender Women: Influence 80% of consumer purchases Make 75% of new home decisions Purchase 60% of cars

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Income

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Generation Gen X (1964-1978) Baby Boomers (1946-1964) Silent Generation (1925-1945)

Millennials (Gen Y) – (1979-1994) -78 Million people -$187 annual spending power

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U.S. Generation Cohorts Cohort

Size

Defining Features

Millennials

78 m

Raised in affluence, tech savvy, perceived immunity from marketing

50 m

Parents relied on day care, accepts diversity, pragmatic and individualistic

(1979-1994)

Gen X (1964-1978)

Baby Boomers (1946-1964)

Control 3/4th of the wealth in the U.S, 76 m seek fountain of youth (hair color, hair replacement), home exercise equipment

Silent Generation 42 m Lead vibrant lives, spend money and (1925-1945) time on grandchildren. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

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Race and Culture

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Multicultural Market Profile

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Psychographic Segmentation • Personality traits • Lifestyle • Values

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VALS Segmentation System

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Behavioral Segmentation Usage occasions

Initiator

User status User

Influencer

Usage rate Buyer-readiness

Buyer

Decider

Decision Roles

Loyalty status

User and Usage

Needs and Benefits Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

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Brand Funnel

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Consumer Attitudes

Enthusiastic

Positive

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Indifferent

Negative

Hostile

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Behavioral Segmentation

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Bases for Segmenting B2B Markets Demographic

Industry, company size, location

Operating Variables

Technology, user status, customer capabilities

Purchasing Approach

Power structure, nature of existing relationship

Situational Factors

Urgency, specific application, size of order

Personal Characteristics

Buyer-seller similarity, loyalty, risk attitude

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Market Targeting Effective Segmentation Criteria Measurable Substantial Accessible Differentiable Actionable

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Market Targeting Porter’s Five Force

Substitute Products

Buyer Power Supplier Power

New Entrants

Rivals Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

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Evaluating and Selecting Segments

Multiple segment specialization

Full market coverage

Single-segment concentration Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Individual marketing Slide 25 of 26

Levels of Segmentation

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