Notes on Segmenting and Targeting Markets
Chapter 8 Segmenting and Targeting
Markets
Segmenting and Targeting
Markets
Characteristics of a Market
1) people or organizations with
2) needs or wants, and with
3) the ability and
Chapter 8
4) the willingness to buy.
Lamb, Hair, McDaniel
2012-2013
A group of people that lacks any one of these characteristics is
NOT a market.
2
Market Segmentation
Market
People or organizations with needs or wants and the ability and willingness to buy. Market
Segment
The Concept of Market Segmentation
A subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs. The process of dividing a market into
Market
meaningful, relatively similar, identifiable
Segmentation segments or groups.
3
4
1
Chapter 8 Segmenting and Targeting
Markets
The Importance of
Market Segmentation
Criteria for Segmentation
Substantiality
Segments must be identifiable and their size measurable.
Accessibility
Members of targeted segments must be reachable with marketing mix.
Responsiveness
and preferences
Segment must be large enough to warrant a special marketing mix.
Identifiability and Measurability
Markets have a variety of product needs
Unless segment responds to a marketing mix differently, no separate treatment is needed. Marketers can better define customer
needs
Decision makers can define objectives
and allocate resources more accurately
5
6
Geographic Segmentation
Bases for Segmentation
Geography
Region of the country or world Demographics
Market size
Psychographics
Market density
Benefits Sought
Climate
Usage Rate
7
8
2
Chapter 8 Segmenting and Targeting
Markets
Benefits of
Regional Segmentation
Demographic Segmentation
Age
New ways to generate sales in sluggish and competitive markets
Scanner data allow assessment of best selling
Markets
Segmenting and Targeting
Markets
Characteristics of a Market
1) people or organizations with
2) needs or wants, and with
3) the ability and
Chapter 8
4) the willingness to buy.
Lamb, Hair, McDaniel
2012-2013
A group of people that lacks any one of these characteristics is
NOT a market.
2
Market Segmentation
Market
People or organizations with needs or wants and the ability and willingness to buy. Market
Segment
The Concept of Market Segmentation
A subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs. The process of dividing a market into
Market
meaningful, relatively similar, identifiable
Segmentation segments or groups.
3
4
1
Chapter 8 Segmenting and Targeting
Markets
The Importance of
Market Segmentation
Criteria for Segmentation
Substantiality
Segments must be identifiable and their size measurable.
Accessibility
Members of targeted segments must be reachable with marketing mix.
Responsiveness
and preferences
Segment must be large enough to warrant a special marketing mix.
Identifiability and Measurability
Markets have a variety of product needs
Unless segment responds to a marketing mix differently, no separate treatment is needed. Marketers can better define customer
needs
Decision makers can define objectives
and allocate resources more accurately
5
6
Geographic Segmentation
Bases for Segmentation
Geography
Region of the country or world Demographics
Market size
Psychographics
Market density
Benefits Sought
Climate
Usage Rate
7
8
2
Chapter 8 Segmenting and Targeting
Markets
Benefits of
Regional Segmentation
Demographic Segmentation
Age
New ways to generate sales in sluggish and competitive markets
Scanner data allow assessment of best selling