Kotler Keller PhillipKevin Lane Marketing Management 14e

Identifying Market Segments and Targets Chapter 8

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice HallSlide 3 of 26 Discussion Questions 1.What are the different levels of market segmentation? 2.In what ways can a company divide a market into segments? 3.What are the requirements for effective segmentation? 4.How should business markets be segmented? 5.How should a company choose the most attractive target markets?

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice HallSlide 4 of 26 Target Marketing Requirements 1.Identify and profile distinct groups of buyers (market segmentation). 2.Select one or more market segments to enter (market targeting). 3.For each, establish and communicate benefits of offering (market positioning).

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice HallSlide 5 of 26 Bases for Segmenting Consumers Geographic Demographic PsychographicBehavioral

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice HallSlide 6 of 26 Geographic Segmentation Geoclustering

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice HallSlide 7 of 26 Demographic Segmentation Age and Life-cycle Stage Life Stage Gender Income Generation Race and Culture

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice HallSlide 8 of 26 Age and Life-Cycle Stage

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice HallSlide 9 of 26 Life Stage

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice HallSlide 10 of 26 Gender Women: Influence 80% of consumer purchases Make 75% of new home decisions Purchase 60% of cars

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice HallSlide 11 of 26 Income

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice HallSlide 12 of 26 Generation Gen X ( ) Baby Boomers ( ) Silent Generation ( ) Millennials (Gen Y) – ( ) -78 Million people -$187 annual spending power

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice HallSlide 13 of 26 CohortSizeDefining Features Millennials ( ) 78 m Raised in affluence, tech savvy, perceived immunity from marketing Gen X ( ) 50 m Parents relied on day care, accepts diversity, pragmatic and individualistic Baby Boomers ( ) 76 m Control 3/4 th of the wealth in the U.S, seek fountain of youth (hair color, hair replacement), home exercise equipment Silent Generation ( ) 42 m Lead vibrant lives, spend money and time on grandchildren. U.S. Generation Cohorts

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice HallSlide 14 of 26 Race and Culture

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice HallSlide 15 of 26 Multicultural Market Profile

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice HallSlide 16 of 26 Psychographic Segmentation Personality traits Lifestyle Values

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice HallSlide 17 of 26 Figure 8.1 VALS Segmentation System

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice HallSlide 18 of 26 Behavioral Segmentation User and Usage Needs and Benefits Decision Roles InitiatorInfluencerDeciderBuyerUser Usage occasions User status Usage rate Buyer-readiness Loyalty status

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice HallSlide 19 of 26 Figure 8.2 Brand Funnel

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice HallSlide 20 of 26 Consumer Attitudes Enthusiastic Positive Indifferent Negative Hostile

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice HallSlide 21 of 26 Figure 8.3 Behavioral Segmentation

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice HallSlide 22 of 26 Bases for Segmenting B2B Markets Demographic Operating Variables Purchasing Approach Situational Factors Personal Characteristics Industry, company size, location Technology, user status, customer capabilities Power structure, nature of existing relationship Urgency, specific application, size of order Buyer-seller similarity, loyalty, risk attitude

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice HallSlide 23 of 26 Market Targeting Effective Segmentation Criteria Measurable Substantial Accessible Differentiable Actionable

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice HallSlide 24 of 26 Market Targeting Porters Five Force Rivals New Entrants Substitute Products Buyer Power Supplier Power

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice HallSlide 25 of 26 Evaluating and Selecting Segments Individual marketing Full market coverage Multiple segment specialization Single-segment concentration

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice HallSlide 26 of 26 Figure 8.4 Levels of Segmentation