Bmgt 411 chapter_7

BMGT 411: Chapter 7

Identifying Market Segments and Targets

http://youtu.be/I_cW1QW4Aig Who is the Target Segment?

http://youtu.be/kBFFVzOCx8c Who is the Target Segment?

http://youtu.be/MWsP2aiBC14 Who is the Target Segment?

Chapter Questions

• In what ways can a company divide a consumer or business market into segments?

• How should a company choose the most attractive target markets?

• What are the different levels of market segmentation?

Effective Targeting Requires…

• Identify and profile distinct groups of buyers who differ in their needs and preferences

• Select one or more market segments to enter

• Establish and communicate the distinctive benefits of the market offering

Segmenting, Targeting, and Positioning (STP)

What is a Market Segment?A market segment consists of a group of customers who share a similar set of needs and wants.

Segmenting Consumer Markets

Geographic

Demographic

Psychographic

Behavioral

Geographic Segmentation

Demographic Segmentation

• Age and life cycle

• Life stage

• Gender

• Income

• Generation

• Social class

• Race and Culture

Demographic Cohorts

Gen Y Cohort Analysis

Be Careful Not to be too explicit in marketing…..

http://thecolbertreport.cc.com/videos/regxdh/millennial-generation-soup-campaign

AARP What demographic segment is most important?

LululemonWhat demographic segment is most important?

Mercedes BenzWhat demographic segment is most important?

Psychographic Segmentation

and The VALS Framework

http://www.strategicbusinessinsights.com/vals/ustypes.shtml

Behavioral Segmentation Based on Needs and Benefits

Initiator

Influencer

Decider

Buyer

User

Behavioral Segmentation: Behavioral Variables

1.Occasions: Time of day, week, month, year, or other defined time in a consumers life

• Ex: Sheetz Breakfast

2.User Status: Non users, ex users, potential users, first time users, regular users

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Behavioral Segmentation: Behavioral Variables

3.Usage Rate: Light, Medium, and Heavy Product Users

4.Buyer Readiness Stage: Unaware, aware, informed, interested, desire, and intention to buy

5.Loyalty:

• Hard Core Loyal's: Always buy one brand

• Split Loyal's: Loyal to two or three brands

• Shifting Loyal's: Shift from one brand to another

• Switchers: Not loyal to any brand

Behavioral Segmentation: Behavioral Variables

• Hard Core Loyal Examples:

• Split Loyal's Example:

• Shifting Loyal Examples:

• Switchers Examples:

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• Enthusiastic Brands

• Positive Brands

• Indifferent Brands

• Negative Brands

• Hostile Brands

Effective Segmentation Criteria

• Measurable: The size, purchasing power, and characteristics of the segment can be measured

• Substantial: A segment is large and profitable enough to serve

• Accessible: The segments can be effectively reached and served

• Differentiable: Distinguishable and respond differently to different marketing mix elements

• Actionable: Affective programs can be developed for attracting and serving these segments

Porter’s 5 Forces Model

Threat of Rivalry

Threat of Supplier Bargaining Power

Threat of Buyer Bargaining Power

Threat of New Entrants

Threat of Substitutes

Figure 7.3 Possible Levels of Segmentation