S15 segmentation and targeting

Segmentation and Targeting

INTERNATIONAL MARKETING

Strategic marketing - STP

Segmentation Targeting Positioning

The right relationship for right customers

• Huge number of customers.

• Widely distributed.• Different needs and

expectations.

Analyzing the marketing strategy

Evolution

Mass market20th Century

Market segmentation21st Century

• Mass marketing.• Mass production.• Mass distribution.• Mass promotion.

• Identifying market segments.

• Selecting one or some of them.

• Developing different products.

Positioning the target market

Segmentation

• Divide the market into smaller groups of consumers.• Define markets’ profiles according to the segmentation.

Targeting

• Assess the potential of certain segments. • Select one or more segments to enter.

Positioning

• Give the product a competitive position.• Design marketing mix.

marketingforprofessionals.co.nz

Segmentation Divide a market into different groups of buyers based on their needs, characteristics or behaviors, and that may require different products or different marketing mix strategies.

Huge and heterogene

ous markets

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Customer segmentation Industry segmentation International markets segmentation

Requirements for an effective segmentation

Customer segmentation

There is no a single way to segment a market.

Geographic

Demographic

Psychographic

Behavioral

Segmentation variables

Individually Combination

Geographic segmentation Divide a market into different geographical units such as nations, states, regions, cities, towns or neighborhoods.

• A company may attend one or more geographical areas but responding to their needs and expectations.

www.choice.com.au

Demographic segmentation Divide the market into groups based on demographic variables such as age, sex, family size, family life cycle, income, occupation, education, religion, race and nationality.

Influence on needs, desires and frequency. Easier to measure.

Age Life cycle

Psychographic segmentation Divide a market into different groups based on social class, lifestyle or personality characteristics.

www.123rf.com

Behavioral segmentationDivide a market into groups according to the knowledge, attitudes, use or consumer response to a product.

Occasion

• Divide according to occasions when customers conceived the idea of buying, make the purchase or use the product.

Benefits

• Market division into groups according to the different benefits that consumers are looking for in the product.

User situation

• No user• Past users• Potential users• First-time users• Regular users

Summary of variablesGeographic

Country or region

Region within a country

Population

Zone conditions & Climate

Industry segmentationGeographic

Location.

DemographicSector, company’s size.

BehavioralNeeds, frequency, loyalty.

Special characteristics of

the companies

International markets segmentation

Having operations abroad represents a big challenge for all the companies

Geographic(Regions)

Economic(Development, system)

Political and legal (Government, barriers)

Cultural(Elements of the culture)

Segmentation

Segmentation between markets

Consumer segments with similar needs and

purchasing behaviors, although they are in different countries.www.atelusa.com

www.telegraph.co.uk

Requirements for an effective segmentation

Effective Segmentation

Segments must be

Measurable (Quantifying)

Accessible(Get to customer)

Differentiated(Different responses)

Applicable(Design their strategies)

Targeting Process of assessing the attractiveness of each market segment and choose one or more

elements to try to enter.

Segmentation

Opportunities

Which? How many?How?

Assessment

Assessment of segmentsS, M, L?Profits,

sth. relative

Size and growth

Competitors, substitute

goods, power of

customers and

suppliers.

Structure

Objectives and

resourcesCompany

Selecting a target market

Mass marketing

Differentiated marketing

Concentrated marketing

Direct marketing

Target market

Set of buyers who have common needs or

characteristics, which the company decides to

attend.

Strategies for reaching target markets

Coverage

MASS MARKETING

Strategy in which a company decides to ignore market segment differences and attend the

entire market with a single offer.

DIFFERENTIATED MARKETING

Market coverage strategy in which a company decides to enter into several market segments

and designs individual offers for each one.

Gain position in different segments

Higher costs

CONCENTRATED MARKETING

Market coverage strategy in which a company tries to get a significant participation in a

submarket or a few submarkets.

Niche is smaller Less competitors Limited resources

DIRECT MARKETING

Adapting products and marketing programs to the needs and wishes of local customer groups

and specific individuals.

Local marketing: Adjusting brands and promotions to the needs and wishes of local consumer groups, such as cities, neighborhoods and even specific stores.

Individual marketing: Adapting products and marketing programs to the needs and preferences of individual customers.