Topic/Objectives: Segmenting and targeting markets Chapter 6 Essential Question: Class: Fundamentals of Marketing Date: 19/3/17 LO1 understand markets and the importance of market segmentation LO2 Overview the steps involved in segmenting market > LO3 Describe the bases commonly used to segment consumer markets > LO4 Discuss the criteria for successful market segmentation and segment profiling LO5 Explain strategies for selecting target markets > LO6 Explain the roles of positioning strategies and product differentiation > LO7Understand and outline issues in segmenting business and onefitofione marketing A LO8 Discuss global and social market segmentation and targeting issues Questions: LO1. What is a market? Market segment Market Segmentation Purpose of market segmentation LO2. Steps in segmenting a market 1.Selecting a market or product category for study LO3. 2. Choosing a basis or bases for segmenting the market What is Segmentation Base Notes: Current and potential customers with needs or wants and the ability and willingness to buy. Subgroup of people or organisations sharing one or more characteristics that cause them to have similar product needs. Process of dividing a market into meaningful, relatively similar and identifiable segments or groups. · Define customer needs and wants more precisely · Differ in size and potential, helps decision makers to define marketing objectives more accurately and to better allocate resources · Evaluation of performance is better when objectives are more precise 1. Select a market or product category for study a. Define the overall market or product category 2. Choose a basis or bases for segmenting the market a. Requires managerial insight, creativity and market knowledge 3. Select segmentation descriptors a. After choosing one or more bases, marketer must select the segmentation variables to use b. Identifies the specific segmentation variables to use 4. Profile and analyse segments a. Includes the segments' size, expected growth, purchase frequency, current brand usage, brand loyalty, and long term sales and profit potential. 5. Select target marketers a. A natural outcome not so much from the process 6. Target strategies when selecting more than one target market within a market a. Segments have been identified, analysed and profiled. 7. Review or develop the product positioning held by the consumer a. Helps to develop and finefitune the market3ing mix despite completing products in that market . Define the market of product category . Can be a market the organisation already competes or · A new but related market or product category or · A totally new market · Manager uses insight and creativity to develop segments · Review consumer market bases o Various variables that have common attributes to describe a market. . Set of characteristics common to individuals, groups or organisations · Can be used to segment a market
Importance of Segmentation ttase Geographic ttase Demographic ttase Psychographic base Benefit base Usage rate base LO4. 3.Selecting segmentation descriptors Criteria for a useful segment Crucial because an inappropriate segmentation strategy can lead to lost sales and missed profit opportunities Geographic segmentation · Segmentation of markets by geographic characteristics such as region,