Chapter 3Market Segmentation and Strategic Targeting

8/17/2019 Chapter 3Market Segmentation and Strategic Targeting

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CHAPTER

THREE

MARKET SEGMENTATION ANDSTRATEGIC TARGETING.

MUHAMMAD SALMAN ARSHADMS-MANAGEMENT(MARKETING)


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LEARNING OBJECTIVES

1. To Understand Why Market Se!entat"on IsEssent"a#.

$. To Understand the Cr"ter"a %or Taret"n Se#e&ted

Se!ents E'e&t"(e#y.). To Understand the Bases %or Se!ent"n

Cons*!ers.

+. To Understand ,o- Se!entat"on and Strate"&

Taret"n Are Carr"ed O*t.

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W,/ SEGMENTATION IS NECESSAR/

• Cons*!er needs d"'ers.

• 0"'erent"at"on he#srod*&ts &o!ete.

• Se!entat"on he#s"dent"%y !ed"a.

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• Not a## &ons*!ers are a#"ke d"'erent &*sto!ersha(e d"'erent needs.

• By segmenting the !arket and &hoos"n taret

!arkets2 &o!an"es &an d"'erent"ate the"rrod*&ts to ro("de the 3ene4ts that these!ents des"re.

• On&e a !arketer has "dent"4ed the"r se!ent2

they &an &hoose !ed"a that "s tareted to thatse!ent %or the"r ad(ert"s"n.


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5OSITIONING

The (a#*eroos"t"on2

e6ressed thro*hro!ot"on2 stat"nthe rod*&t7s or

ser("&e7s &aa&"tyto de#"(er se&"4&

3ene4ts.

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• Positioning "s the *n"%y"n e#e!ent o% ea&h!arket"n !"6. 5rod*&t2 #a&e2 r"&e2 andro!ot"ona# strate"es !*st -ork to state the

rod*&t or ser("&e7s a3"#"ty to de#"(er 3ene4ts tothe &ons*!er.


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CRITERIA 8OR E88ECTIVE TARGETING

Identi!"#e

Si$e!"#e

St!"#eA%%essi"#

e

Cong&'ent it te%om*!n+,s

o"e%ties !nd&eso'&%es

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• 8"rst o% a##2 the taret !*st 3e identi!"#e. Th"s!eans that the !arketer !*st 3e a3#e to see or 4nd the&hara&ter"st"& they ha(e &hosen %or se!entat"on.

• The se!ent !*st a#so 3e si$e!"#e. It !*st 3e #areeno*h to 3e ro4ta3#e to the !arketer.

• A st!"#e se!ent !eans that the &ons*!ers are not94&k#e: and #"ke#y to &hane (ery ;*"&k#y. A ro* o%&ons*!ers !*st 3e !%%essi"#e to 3e tareted.

• The !arketer !*st 3e a3#e to rea&h that !arket "n ana'orda3#e -ay. 8"na##y2 the taret !*st 3e %ong&'ent -"th the &o!any7s o3


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BASES 8OR SEGMENTATION

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• Th"s t-o=3y=t-o !atr"6 "s "!ortant %or *nderstand"ntyes o% se!entat"on s&he!es.

• It "s oss"3#e to 3reak se!entat"on "nto t-o 3roadro*s those that are 3ased on the &ons*!ers

the!se#(es and those that are 3ased on the &ons*!ers7"ntera&t"on or otent"a# "ntera&t"on -"th the rod*&t andare there%ore &ons*!t"on 3ased.

• W"th"n ea&h o% these t-o #arer tyes o% s&he!es2se!entat"on (ar"a3#es &an 3e &ons"dered to 3e 3asedon %a&ts or -hat "s a3so#*te#y kno-n and !eas*rea3#ea3o*t the &ons*!er (ers*s &on"t"ons2 -h"&h area3stra&t and &an 3e deter!"ned on#y thro*h !ore&o!#e6 ;*est"on"n.


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CONSUMER=ROOTE0 SEGMENTATIONBASES

0e!orah"&s

Geode!orah"&

5ersona#"ty Tra"ts

L"%esty#es

So&"o&*#t*ra#

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0EMOGRA5,IC SEGMENTATION

12

Ae Gender

Mar"ta# Stat*s8a!"#y L"%e=

&ye

In&o!e2Ed*&at"on2 and

O&&*at"on

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• Demog&!*i%s !&e te %o&e o/ !#most !##segment!tion "e%!'se te+ !&e e!s+ !nd #ogi%!#.

• In !ddition0 te+ !&e ! %ost-e1e%tie !+ to &e!%

segments !nd demog&!*i% si/ts !&e e!sie& toidenti/+ t!n ote& t+*es o/ si/ts.

• 2en &ese!&%ing segment!tion !nd medi! e3*os'&e0! %ons'me& &ese!&%e& i## #e!&n t!t medi! e3*os'&eis o/ten di&e%t#+ &e#!ted to demog&!*i%s.

• Age segment!tion in%#'des segments s'% !s te"!"+ "oome&s !nd gene&!tions 4 !nd 5.

• 6!mi#+ #i/e-%+%#e is "!sed on te *&emise t!t m!n+/!mi#ies *!ss t&o'g simi#!& *!ses in tei& #ies !nds!&e m!o& #i/e eents s'% !s moing0 m!&&i!ge0

"i&t o/ ! %i#d0 !nd &eti&ement.• In%ome0 ed'%!tion0 !nd o%%'*!tion tend to tie

togete& !nd #e!d to segment!tion "!sed on so%i!#%#!ss.


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GEO0EMOGRA5,IC SEGMENTATION

• Based on eorahy and de!orah"&s

• 5eo#e -ho #"(e ose to one another are s"!"#ar

• 9B"rds o% a %eather >o&k toether:

Geodemog&!*i% se!entat"on "s a o*#ar *seo% eorahy "n taret"n. 5eo#e -ho #"(e ose toone another are #"ke#y to 3e s"!"#ar "n tastes2"n&o!es2 #"%esty#es and &ons*!t"on. They !"ht

eat s"!"#ar %oods2 #"ke the sa!e !o("es2 and takethe sa!e tyes o% (a&at"ons.

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5ERSONALIT/ TRAITS

• 5eo#e o%ten do not "dent"%y these tra"ts 3e&a*se theyare *arded or not &ons&"o*s#y re&on"?ed

• Cons*!er "nno(ators• Oen !"nded

• 5er&e"(e #ess r"sk "n try"n ne- th"ns

Pe&son!#it+ t&!its he# *s "dent"%y -hat se!entsare (a#*a3#e to !arketers.

8or "nstan&e2 "% an "nno(ator a#so ass"4es

the!se#(es h"h on an 9e6h"3"t"on: ersona#"ty tra"t2"t !eans they -ant to 3e the &enter o% a ro* and!"ht 3e "!ortant as these are the tye o%"nno(ators to sread -ord=o%=!o*th !essaesreard"n ne- rod*&ts and ser("&es.

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LI8EST/LES

• 5sy&horah"&s

• In*des a&t"("t"es2"nterests2 and o"n"ons

• They e6#a"n 3*yer7s*r&hase de&"s"ons and&ho"&es

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VALS 8IGURE

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• 7ALS is te most *o*'#!& segment!tion s+stemt!t %om"ines #i/est+#es !nd !#'es. 5o' %!nsee o it is &e#!ted to M!s#o,s ie&!&%+ o/

needs !nd te %on%e*t o/ so%i!# %!&!%te&.• Te s+stem #oo8s !t t&ee *&im!&+ moti!tions

!nd ten te &eso'&%es t!t indiid'!#s migt!e to d&! '*on. Te #oe& &eso'&%e%ons'me& is !t te "ottom !nd #!"e#ed s'&io&si#e te igest &eso'&%e %ons'me& is o/tente inno!to&.

• Tis e" #in8 i## t!8e +o' to te 7ALS e"siteso +o' %!n see e&e +o' !&e %#!ssied. I/ +o'

!&e ! /'##-time st'dent0 &'n te s'&e+ ti%e 9on%e it +o'& on s!#!&+ !nd on%e it +o'&*!&ents,.


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SOCIO=CULTURAL VALUES AN0 BELIE8S

• So&"o#o"&a# @ ro*

• Anthroo#o"&a# @ &*#t*ra#

• In*de se!ents 3ased on

• C*#t*ra# (a#*es• S*3=&*#t*ra# !e!3ersh"

• Cross=&*#t*ra# a#"at"ons

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• An A!er"&an !"ht "dent"%y -"th &o!!onA!er"&an %'#t'&!# (a#*es2 s*&h as 4tness andhea#th 3*t a#so -"th s'"-%'#t'&!# (a#*es "% they

are ,"san"& or As"an A!er"&ans.• In th"s #o3a# -or#d2 !arketers !*st o%ten th"nk

&ross=&*#t*ra##y2 "n*d"n !any &o*ntr"es and!ore #o3a# !arket"n se!entat"on.

• A &ons*!er !ay 3e &ross=&*#t*ra# "% they -ere3orn "n one &o*ntry and are no- #"("n "n another.


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CONSUM5TION=S5ECI8ICSEGMENTATION BASES

Usae rate

Usae s"t*at"on

Bene4tse!entat"on

5er&e"(ed 3rand#oya#ty

Brand re#at"onsh"

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CONSUM5TION=S5ECI8IC SEGMENTATIONUSAGE=BE,AVIOR

• Us!ge &!te• A-areness stat*s

• Le(e# o% "n(o#(e!ent

Usae rate "s o%ten 3ased on -hether a ro* o% &ons*!ersare hea(y2 !ed"*!2 #"ht2 or non*sers o% a rod*&t.

Many !arketers taret the hea(y &ons*!ers s"n&e they areo%ten the !ost #oya# and a&&o*nt %or the #arest ort"on o%sa#es.

A &o!any -"th a stron ro-th o3


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CONSUM5TION=S5ECI8IC SEGMENTATIONUSAGE=BE,AVIOR

• Usae=s"t*at"on se!entat"on• Se!ent"n on the 3as"s o% se&"a# o&&as"ons or s"t*at"ons

• E6a!#e When I7! a-ay on 3*s"ness2 I try to stay at as*"tes hote#.

Usae rate or a!o*nt "s "!ortant to so!e !arketers2 3*t "t!"ht a#so 3e -orth &ons"der"n W,EN a "(en rod*&t "s*sed.

Th"s "s the 3as"s %or a 's!ge-sit'!tion se!entat"onoort*n"ty. 5eo#e !"ht &ons*!e &erta"n rod*&ts %orse&"a# e(ents2 &erta"n days o% the -eek2 or &erta"n t"!esd*r"n the year. Th"nk o% the r"se o% sa#es "n &ho&o#ate and>o-ers %or Va#ent"ne7s 0ay.

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W,IC, CONSUM5TION=RELATE0SEGMENTATION IS 8EATURE0 IN T,IS A0

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T,IS IS AN EDAM5LE O8 A SITUATIONALS5ECIAL USAGE SEGMENTATION.

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BENE8ITS SEGMENTATION

• Bene4ts so*ht reresent &ons*!er needs.

• I!ortant %or os"t"on"n.

• Bene4ts o% !ed"a.

In !any -ays2 se!entat"on "s t"ed to the "enets that aro* des"res %ro! yo*r rod*&t or ser("&e. no-"n these

3ene4ts "s "!ortant %or os"t"on"n yo*r rod*&t "n the!"nds o% the &ons*!er. Cons*!ers are &onstant#y -e"h"n

the 3ene4ts o% d"'erent tyes o% !ed"a and not"&"n thatd""ta# !ed"a !"ht 3e re%erred "n "!!ed"a&y and

a&&ess"3"#"ty 3*t that trad"t"ona# !ed"a o%ten ro("des !ore

deth and deta"#s.

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BENE8ITS VISITING TOURISTS SEE INNATIONAL 5AR

Segment Des%&i*tion

En("ron!enta#"sts Interested "n an *no##*ted2 *n=so"#t nat*ra#en("ron!entand "n &onser(at"on. Not "nterested "n so&"a#"?"n2

enterta"n!ent2 or sorts. 0es"re a*thent"&"tyand #ess !an=!ade str*&t*res and (eh"es"n the ark.

Want="t=a## To*r"sts

Va#*e so&"a#"?"n and enterta"n!ent !ore than&onser(at"on. Interested "n !ore a&t"("t"es andoort*n"t"es %or !eet"n other to*r"sts. 0o not

!"nd the 9*r3an"?at"on: o% so!e ark se&t"ons.

Indeendent To*r"sts

Look"n %or &a#! and *no##*ted en("ron!ent2e6#or"n the ark 3y the!se#(es2 and stay"n ata &o!%orta3#e #a&e to re#a6. In>*en&ed 3y -ordo% !o*th "n &hoos"n tra(e# dest"nat"ons.

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BRAN0 LO/ALT/ AN0 RELATIONS,I5S

• Brand #oya#ty "n*des• Beha("or

• Att"t*de

•8re;*en&y a-ard rora!s are o*#ar

• C*sto!er re#at"onsh"s &an 3e a&t"(e or ass"(e

• Reta"# &*sto!ers seek• 5ersona# &onne&t"ons (s. %*n&t"ona# %eat*res

• Bank"n &*sto!ers seek• Se&"a# treat!ent

• Con4den&e 3ene4ts

• So&"a# 3ene4ts

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• :&!nd #o+!#t+ "n*des the 3eha("or to the 3rand ho- o%ten so!e3ody *r&hases the 3rand2 "n add"t"onto the att"t*de or %ee#"n the &ons*!er has to a3rand.

• Many &o!an"es ha(e %re;*en&y a-ard or #oya#tyrora!s -here #oya# &*sto!ers re&e"(e re-ards and3ene4ts %or *r&has"n o%ten.

• C*sto!er re#at"onsh"s are (ery &o!#e6 and d"'er

3ased on &o!!"t!ent 3y the &*sto!ers2 the"r senseo% #oya#ty2 the"r e6e&tat"ons o% se&"a#ty treat!ent2the"r &on4den&e "n the &o!any2 and ho- they aretreated 3y sta' and e!#oyees %ro! the &o!any.


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IM5LEMENTING SEGMENTATIONSTRATEGIES

• M"&ro= and 3eha("ora# taret"n• 5ersona#"?ed ad(ert"s"n !essaes

• Narro-&ast"n

• E!a"#

• Mo3"#e

• Use o% !any data so*r&es

Mi%&o-t!&geted 3ean "n $+ and "s ro-"n 4e#d -"th"n!arket"n. It "s ro-"n d*e to the !arketer7s a3"#"ty to*se &o!#e6 data3ases and ersona#"?ed !ed"a "n*d"ne!a"# and !o3"#e hones. M"&ro=taret"n %o&*ses onde#"(er"n a ersona#"?ed ad(ert"s"n !essae to the *ser-hether they are at -ork2 at ho!e2 or on=the=o.

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IM5LEMENTING SEGMENTATIONSTRATEGIES

• Con&entrated Market"n• One se!ent

• 0"'erent"ated• Se(era# se!ents -"th "nd"("d*a# !arket"n !"6es

• Co*nterse!entat"on

Con&entrated !arket"n *s*a##y "n(o#(es on#y one se!ent2-hereas a d"'erent"ated !arket"n stratey "s taret"nse(era# se!ents -"th "nd"("d*a# !arket"n !"6es.

0"'erent"ated !arket"n "s *s*a##y *sed 3y 4nan&"a##y stron&o!an"es that are -e## esta3#"shed "n the"r !arket se&tor.

Co*nterse!entat"on "n(o#(es &o!3"n"n e6"st"n se!ents%or a &o!any to 3e&o!e !ore e&"ent and ro4ta3#e.

Chater Three

Chapter 3Market Segmentation and Strategic Targeting

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