Roy Rogers

Topics: Marketing, Product differentiation, Strategic management Pages: 6 (864 words) Published: January 13, 2013

Target Marketing Process (STP)
Identify markets with unfulfilled needs

Segmentation, Targeting and Positioning
Albert CARUANA Ph.D.

Determining market segmentation

Selecting market to target

Positioning through marketing strategies

Customer-Oriented Marketing Strategy • Segment market:
– Divide larger market into groups of people with similar demands and responses.

• Generic definition: A market is a group of people with purchasing power who are willing to spend money to satisfy their need • Product Market: consists of a group of people with similar needs who satisfy their needs through the purchase of particular products.

• Target marketing:
– Evaluate segments and select one or more segments to enter.

• Positioning:
– Create clear, distinctive and desirable place relative to competing products in minds of target customers.

Market Segmentation
• Segmentation: the subdividing of a market into homogenous subsets of customers, where any subset can be selected as a market target to be reached with a distinctive marketing mix – Consumer Segmentation – Industrial Segmentation

Consumer Segmentation Geographic
• • • • State Region Country size Climate



Consumer Segmentation Demographic
Most often used because: • correlate well with sales • easy to identify and measure • used to describe advertising media audiences

Consumer Segmentation Demographic
– Age - Young , middle age, senior – Gender – Type of Household - single, traditional – Family size – Family Life Cycle – Occupation, Education, Income – Nationality, Religion, Race


Digital maps show racial divides in US cities
Detroit Chicago

One dot = 25 people • White people •Black people •Asians •Hispanics

Consumer Segmentation
• Psychographic
– Personality - macho image eg Marlboro – Lifestyle - people often use products to make statements about themselves

• Behavioural
– usage – Usage rate - in packaged goods 50% of users account for 80 to 90% of purchases – Benefits sought - eg Toothpaste



If you like your eggs…
• Sunny Side Up - You are an optimist and easy going. • Over Easy - You are precise and know what you want. • Hard Boiled (Hard Cooked) - You are a no-nonsense type, quick to form an opinion. • Scrambled - You are agreeable and steady, go with the flow. • Soft Boiled (Soft Cooked) - You are gentle, sensitive, neat, not easy to please. • Poached - You are orderly and likes things in their place. • Omelet - You enjoy taking risks!

Bases for Segmentation
INDUSTRIAL • Product • Geographic • End-user application: Operating/process variables • Company demographics • Personal characteristics of buyers • Situational factors • Buying criteria

Requirements for Segmentation
Most markets contain a variety of segments.
• Measurable (distinguishable) - Can the size of the market segment be measured? – if it cannot be defined it cannot be measured – if it cannot be measured sales cannot be estimated

Requirements for Segmentation
• Accessible - Is the segment identified accessible? Can it be reached effectively and efficiently? – distribution – with advertising and promotions. Utilisation of mass media is only viable if a segment is sufficiently large • Compatible - Can effective marketing programs be developed to attract and serve the segment identified? – with resources of the company

• Sizeable - Is the market segment large and profitable enough to serve? – large enough to support independent marketing effort – marketing only guarantees to serve needs that can be met at a profit

All requirements must be met

• Strengthens market position • Increases profit by:
– identification of new product opportunities
• e.g. Shampoo, watches

• Involves risks as a result of higher marketing costs
– R&D and MR Costs –...
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