HFT 2500 Ch.8 Market Segmentation, Targeting,and Positioning

steps in segmentation
1. marketing segmentation
2. market targeting
3. market positioning
market segmentation
-dividing a market into direct groups of buyers who might require separate products or marketing mixes
no single way to segment market
geographic segmentation:dividing the market into different geographic units, such as nations, states, regions, counties, cities, or neighborhoods
market segmentation: geographic segmentation
dividing the market into different geographic units, such as nations, states, regions, counties, cities, or neighborhoods. ex cubans eat black beans, not colombians
market segmentation: demographic segmentation
consists of dividing the marketing into groups based on demographic variables such as age, life cycle, gender, income, occupation, education, religion, race, and nationality
demographic variables easy to measure
market segmentation: age and life cycle
peferences change with age, some companies offer diff products for diff ages
market segmentation: gender segmentaion
single woman most likely to increase spending on restaurants rather than men or couples when salary increased.
gender marketing most effective when combined with lifestyle and demographic info
market segmentation: income segmentation
dividing a market into different income groups
market segmentation: psychographic segmentation
dividing a market into different groups based on social class, lifestyle, or personality characteristics
marketers also use personality, royal caribbean appeals to high energy couple
divided into social class, lifestyle, personality
market segmentation: behavioral segmentation
buyers divided into groups based on their knowledge, attitude, and use or response to a product
market segmentation: occasion segmentation
grouped according to occasion, ex airlines aimed at business, memorial and labor day= mini vacation, honey mooners
market segmentation: benefits sought
buyers can be grouped to product benefits they seek
useful bc 1. managers can develop products with features that provide the benefits their customers are seeking 2. managers communicate more effectively with customers
some hotels allow dogs and reward dog and guest for coming
market segmentation: user status
potential and regular users, nonusers, former users
market segmentation: usage rate
burger king super fans age 18-34, make up 18% of chain’s customers but are half of all visits.
PRIZM
classifies US households into 66 demographically and behaviorally distinct segments, organized into 14 different social groups.
can help marketers segment people and locations into marketable groups of like-minded consumers
requirements for effective segmentation
-measurability: segment’s size and purchasing power, some are hard to measure eg teens that drink to piss off parents
-accessibility: segments can be assessed or served
-sustainability: degree to which segments are large or profitable enough to serve as markets, should be largest homogenous group economically feasible to supposrt tailored marketing program
-actionability: degree to which effective programs can be designed for attracting and serving segments
Market targeting
when evaluating diff market segments, a firm must look at 3 factors:
-segments size and growth (fastest growing segments aren’t always most attractive for every company)
-segment structured attractiveness (can be less attractive with many strong aggressive competitors)
-company objectives and resources (company should only enter segments where it can gain sustainable advantages over competitors. also has to fit with company image)
selecting market strategies
undifferentiated marketing
differentiated marketing
concentrated marketing
undifferentiated marketing
company ignores market segmentation differences and goes after the entire market with one market offer, what is common consumer needs rather than differences
differentiated marketing
company targets several marketing segments and designs separate offers for each. produces more sales than undifferentiated marketing.
concentrated marketing
appealing to companies with limited resources, instead of going for a small share of a large market the firm purses a large share of one or a few small markets. ex four seasons and rosewood hotel concentrate on high priced hotel room market.
-has higher than normal risks, so instead companies like to focus on 2 or more markets
behavioral segmentation
dividing a market into groups based on consumer’s knowledge, attitude, use, or response to a product
competitive advantage
an advantage oveer competitors gained by offering consumers greater value either through lower prices or by providing more benefits that justify higher prices
competitor’s strategies
when competitors use segmentation, undifferentiated use undifferentiated marketing, a firm can gain an advantage by using differentiated or concentrated marketing
confused positioning
leaving buyers with a confused image of a company
degree of product homogeneity
undifferentiated marketing is more suited for homogeneous products. Products that can vary in design, such as restaurants and hotels, are more suited to differentiation or concentration
demographic segmentation
dividing the market into groups based on demographic variables such as age, gender, family size, family life cycle, income, occupation, education, religion, race, and nationality
gender segmentation
dividing a market on the basis of gender
geographic segmentation
dividing a market into different geographic units such as nations, states, regions, counties, cities, or neighborhoods
income segmentation
dividing a market into different income groups
market homogeneity
if buyers have the same tastes, buy a product in the same amounts, and react the same way to marketing efforts
positioning tasks consists of three steps
1. identifying a set of possible competitive advantages on which to build a position
2. selecting the right competitive advantages
3. effectively communicating and delivering the chosen position to a carefully selected target market