Unit 7.Market SegmentationTargeting, and Positioning
Unit 7. Market Segmentation, Targeting, and Positioning
MarketSegmentationMarkets consist of buyers,and buyers differ inone or more ways.They may differ in their wantsresources,locations,buying attitudes,and buyingpractices.Through market segmentationcompanies dividelarge,heterogeneous marketsinto smallersegmentsthat can be reached moreefficientlyandeffectivelywithproductsandservices that match their unique needs. In thisunit,we discussthree important segmentationtopics:segmenting consumer markets,segmentingbusinessmarkets,and requirementsforeffectivesegmentation
Market Segmentation Markets consist of buyers, and buyers differ in one or more ways. They may differ in their wants, resources, locations, buying attitudes, and buying practices. Through market segmentation, companies divide large, heterogeneous markets into smaller segments that can be reached more efficiently and effectively with products and services that match their unique needs. In this unit, we discuss three important segmentation topics: segmenting consumer markets, segmenting business markets, and requirements for effective segmentation
Steps in Market SegmentationTargeting, and Positioning (See P118)MarketSegmentation1.Identify bases forsegmenting the market2.Developsegment profilesMarket Targeting3.Develop measure ofsegment attractiveness4.Select target segmentsMarketpositioning5.Develop positioning fortarget segments6.Develop a marketingmix for each segment
3 Steps in Market Segmentation, Targeting, and Positioning (See P118) Market Segmentation 1. Identify bases for segmenting the market 2. Develop segment profiles Market Targeting 3. Develop measure of segment attractiveness 4. Select target segments Market positioning 5. Develop positioning for target segments 6. Develop a marketing mix for each segment
SegmentingConsumerMarketsThere is no single way to segment a market.A marketer hastotry differentsegmentation variables,aloneandincombination,to find the best way to view the marketstructure.The major elements that might be used insegmentingconsumermarketsaregeographicdemographic,psychographic,andbehavioralvariablesGeographicsegmentationcalls for dividing the market intodifferentgeographical unitssuch asnations,regions,statescounties,cities,or neighborhoods.A company may decideto operate in one or a few geographicalareas,or to operatein all areasbutpay attention to geographical differencesinneedsandwants
Segmenting Consumer Markets There is no single way to segment a market. A marketer has to try different segmentation variables, alone and in combination, to find the best way to view the market structure. The major elements that might be used in segmenting consumer markets are geographic, demographic, psychographic, and behavioral variables. Geographic segmentation calls for dividing the market into different geographical units such as nations, regions, states, counties, cities, or neighborhoods. A company may decide to operate in one or a few geographical areas, or to operate in all areas but pay attention to geographical differences in needs and wants
Demographic segmentation divides the market into groupsbased on variables such as age,gender,family size,familylife cycle,income,occupation,education,religion,race,generation, and nationality.Demographicfactors are themostpopularbasesforsegmenting customergroups.Onereason is that consumer needs,wants,and usageratesoftenvaryclosely with demographicvariables.Another is that demographicvariables are easierto measurethanmost othertypes of variables.Even whenmarketsegmentsarefirst defined using other bases,suchasbenefitssought orbehavior,their demographiccharacteristicsmustbeknown in orderto assessthe sizeofthe target market and to reach it efficiently
Demographic segmentation divides the market into groups based on variables such as age, gender, family size, family life cycle, income, occupation, education, religion, race, generation, and nationality. Demographic factors are the most popular bases for segmenting customer groups. One reason is that consumer needs, wants, and usage rates often vary closely with demographic variables. Another is that demographic variables are easier to measure than most other types of variables. Even when market segments are first defined using other bases, such as benefits sought or behavior, their demographic characteristics must be known in order to assess the size of the target market and to reach it efficiently