MBA Marketing Management NUML asadklair@hotmail.com

1. Identifying Market
Segments and
Targets

2. Four levels of Micromarketing
Segments
Local areas Individuals
Niches

3. Steps in Market Segmentation, Targeting
and Positioning
• Identify and profile distinct groups of buyers who differ
in their needs and preferences(market segmentation).
• Select one or more market segments to enter(market
targeting).
• Establish and communicate the distinctive benefits of
the market offering(market positioning).

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

5. Segment Marketing
Marketer must identify the markets and decide which
one to target
Examples:
•Siemens Electrical Apparatus
•Cebu Pacific Airlines

6. Flexible Marketing Offerings
• Naked solution: Product
and service elements that
all segment members
value
• Discretionary options:
Some segment members
value options but not all
Segment Marketing

7. • Homogeneous preferences exist when consumers want
the same things
• Diffused preferences exist when consumers want very
different things
• Clustered preferences reveal natural segments from
groups with shared preferences
Preference Patterns
Segment Marketing

8. Preference Patterns(ice cream buyers)

9. Niche Marketing
A Niche is a narrowly defined customer group looking for
a distinct mix of benefits. Has a distinct set of needs, willing to
pay a premium, is fairly small, gains economies through
specialization
Examples:
•Luxury cars ,designer clothes, etc
•Specializing in a certain field of medicine

10. Local marketing
Tailoring to needs and wants of local groups. Emphasis on
local marketing initiatives.
Examples:
•Citibank
•McDonald’s
•Private practice of doctors in different areas

11. Customerization
Examples:
•Specialty bakeshops making
custom designed cakes, etc.
•Patient care is individualized
Combines operationally driven mass customization with
customized marketing in a way that empowers consumers
(individuals)to design the product and service offering of their
choice.

12. Segmenting Consumer Markets
Geographic
Region, City or Town
Size, Density, Climate
Demographic
Age, Gender, Family size
and Life cycle, Race,
Occupation, or Income
Lifestyle or Personality
Psychographic
Occasions, Benefits,
Uses, or Attitudes
Behavioral

13. Geographic Segmentation
Dividing market into geographical units .Can be
divided into nations, states, regions, countries, cities
or neighborhoods

14. Demographic Segmentation
Age and Life CycleAge and Life Cycle
Life StageLife Stage
GenderGender
IncomeIncome
GenerationGeneration
Social ClassSocial Class

15. Demographic Segmentation
Market divided into groups based on variables such as age,
family size, family life cycle, gender, income, occupation,
education, religion, etc.
Examples:
•Dove’s Campaign for Real Beauty
•Pond’s Age Defying Serum
•Age-specific specialization (Pediatrics, Geriatrics,etc.)
Gender specific specialization (OB-Gynae, Urology, etc.)

16. Psychographic Segmentation
Psychographics is the science of using psychology and
demographics to better understand consumers. Market is
divided into different groups on the basis of
psychological/personal traits, lifestyle, or values

17. Psychographic Segmentation:
The VALS Segmentation System

18. Behavioral Segmentation
Divide market into groups on the basis of their knowledge of,
attitude toward, use of, or response to a product ,i.e based
on decision roles and behavioral variables

19. Behavioral Segmentation
Decision Roles
• Initiator
• Influencer
• Decider
• Buyer
• User
Behavioral Variables
• Occasions
• Benefits
• User Status
• Usage Rate
• Buyer-Readiness
• Loyalty Status
• Attitude

20. Behavioral
Segmentation
Breakdown

21. Segmenting for Business Markets
DemographicDemographic
Operating VariableOperating Variable
Purchasing ApproachesPurchasing Approaches
Situational FactorsSituational Factors
Personal
Characteristics
Personal
Characteristics

22. Major Segmentation Variables for
Business Markets
Demographic
1. Industry: Which industries should we serve?
2. Company size: What size companies should we serve?
3. Location: What geographical areas should we serve?
Operating Variables
4. Technology: What customer technologies should we focus on?
5. User or nonuser status: Should we serve heavy users, medium
users, light users, or nonusers?
6. Customer capabilities: Should we serve customers needing many
or few services?

23. Major Segmentation Variables for
Business Markets
Purchasing Approaches
7. Purchasing-function organization: Should we serve companies with
a highly centralized or decentralized purchasing organization?
8. Power structure: Should we serve companies that are engineering
dominated, financially dominated, and so on?
9. Nature of existing relationship: Should we serve companies with
which we have strong relationships or simply go after the most
desirable companies?
10.General purchasing policies: Should we serve companies that
prefer leasing? Service contract? Systems purchases? Sealed
bidding?
11.Purchasing criteria: Should we serve companies that are seeking
quality? Service? Price?

24. Major Segmentation Variables for
Business Markets
Situational Factors
12. Urgency: Should we serve companies that need quick and sudden
delivery or service?
13. Specific application: Should we focus on a certain application of
our product rather than all applications?
14. Size or order: Should we focus on large or small orders?
Personal Characteristics
15. Buyer-seller similarity: Should we serve companies whose people
and values are similar to ours?
16. Attitude toward risk: Should we serve risk-taking or risk-avoiding
customers?
17. Loyalty: Should we serve companies that show high loyalty to their
suppliers?

25. Market Targeting

26. • Size, purchasing power, profiles
of segments can be measured.
• Segments can be effectively
reached and served.
• Segments are large or profitable
enough to serve.
MeasurableMeasurable
AccessibleAccessible
SubstantialSubstantial
DifferentialDifferential
ActionableActionable
• Segments must respond
differently to different marketing
mix elements & programs.
• Effective programs can be
designed to attract and serve the
segments.
Effective Segmentation Criteria

27. Steps in Segmentation Process
• Need-based segmentation. Group customers into segments
based on similar needs and benefits sought by customers in
solving a particular consumption problem.
• Segment identification. For each needs-based segment,
determine which demographics, lifestyles, and usage behaviors
make the segment distinct and identifiable (actionable).
• Segment attractiveness. Using predetermined segment
attractiveness criteria (such as market growth, competitive
intensity, and market access), determine the overall
attractiveness of each segment.

28. Steps in Segmentation Process
• Segment profitability. Determine segment profitability.
• Segment positioning. For each segment, create a “value
proposition” and product-price positioning strategy based on that
segment’s unique customer needs and characteristics
• Segment acid test. Create “segment storyboard” to test the
attractiveness of each segment’s positioning strategy.
• Market mix strategy. Expand segment positioning strategy to
include all aspects of the marketing mix: product, price,
promotion, and place.

29. Evaluating Market Segments
• Segment Size and Growth
– Analyze current sales, growth rates and expected profitability
for various segments.
• Segment Structural Attractiveness
– Consider effects of: competitors, availability of substitute
products and, the power of buyers & suppliers.
• Company Objectives and Resources
– Company skills & resources needed to succeed in that
segment(s).
– Look for Competitive Advantages.

30. Patterns of Target Market Selection

31. Patterns of Target Market Selection

32. Patterns of Target Market Selection

33. Any Queries ?