Download - Market Segments and Targets
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Market Segments and Targets
TMT, MKT 460
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Mass Marketing• The seller engages in the mass production, mass distribution and mass promotion of one product for all buyers.
• Creates the largest potential market.
• Lower Cost
• Lower price or higher margin
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Segmentation• Segment Marketing: Consists of a group of customers
who share a similar set of needs and wants.
• Niche Marketing: Is a more narrowly defined customer group seeking a distinctive mix of benefits.
• Local Marketing: Tailored to the needs and wants of local customer groups in trading areas, neighborhoods, even individual stores.
• Individual Marketing: “Segments of one”, “customized marketing” or one-to-one marketing”
• Customerization: A company is customerized when it is able to respond to individual customers by customizing its products.
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Benefits of Market Segmentation
• Identifies opportunities for new product development
• Helps in design of marketing programs that are most effective for reaching homogeneous groups of consumers
• Improves the allocation of marketing resources.
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Segmenting Consumer Markets
Geographic
Demographic
Psychographic
Behavioral
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Demographic Segmentation
Age and Life Cycle
Life Stage
Gender
Income
Generation
Social Class
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Psychographic Segmentation
• Science of using psychology & demographics to better understand consumers.
• Divided into different groups on the basis of psychological/personality traits, lifestyle or values.
• People within same demographic group can exhibit very different psychographic profile.
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Behavioral Segmentation
• Decision Roles
• Initiator
• Influencer
• Decider
• Buyer
• User
• Behavioral Variables
• Occasions
• Benefits
• User Status
• Usage Rate
• Buyer-Readiness
• Loyalty Status
• Attitude
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The Brand Funnel Illustrates Variations in the
Buyer-Readiness Stage
• Aware
• Ever tried
• Recent trial
• Occasional user
• Regular user
• Most often used
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Loyalty Status
Switchers
Shifting loyals
Split loyals
Hard-core
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Figure 8.3 Behavioral Segmentation Breakdown
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Nokia’s Differentiated Marketing Strategy
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Steps in Segmentation Process
Needs-based segmentation
Segment identification
Segment attractiveness
Segment profitability
Segment positioning
Segment acid test
Marketing-MixStrategy
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Effective Segmentation Criteria
Measurable
Substantial
Accessible
Differentiable
Actionable
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Estimating Market Sales Potential
Market Sales Potential = B × Q × P
Market Sales for cola-flavored carbonated soft drinks
=
Population aged 8 years and over × proportion of the population that consumes carbonated soft drinks on a regular basis × proportion of the population preferring cola-flavored soft drinks × the average number of soft drinks consumed per day (in ounce) × 365 days in a calendar year × average price of per ounce of cola
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Sales and Profit Forecasting
Total estimated prospective buyers 1 million
times
Target market (25% of total buyers) × .25
times
Distribution/Communication coverage (75% of target market)
× .75
times
Annual purchase rate (20 units per year)
× 20
times
Average offering unit price (BDT 10.00) × 10
Forecasted sales BDT 37.5 million
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Figure 8.4 Patterns of Target Market Selection
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Figure 8.4 Patterns of Target Market Selection
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Figure 8.4 Patterns of Target Market Selection
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Recent Applications of Segmentation
• SNA (Social Network Analysis): Refers to methods used to analyze social networks, social structures made up of individuals (or organizations) called "nodes", which are tied (connected) by one or more specific types of interdependency, such as friendship, kinship, common interest, financial exchange, dislike, sexual relationships, or relationships of beliefs, knowledge or prestige.
• Database Marketing: Database marketing is a form of direct marketing using databases of customers or potential customers to generate personalized communications in order to promote a product or service for marketing purposes. The method of communication can be any addressable medium, as in direct marketing.
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SNA