Chapter 3 – Market Segmentation and Strategic Targeting
Mass (undifferentiated) marketing –single standardized product is offered, with uniformed marketing
strategy (agricultural products & very basic manufactured goods)
Segmentation- process of dividing potential market into distinct subsets of consumers with a common
need/characteristic & selecting one or more segments to target with specifically designed marketing mix
-segmentation, targeting & positioning-key elements of marketing; enable producers to avoid
competition by differentiating (price, styling, packaging, promotional appeal, method of distribution, level of service)
To be an effective target, a segment should be:
1/ Identifiable - divide market into separate segments on the basis of common or shared
needs/characteristics that are relevant to product/service
-some segmentation variables are easy to identify (demographics) & others can be determined through
questioning (education, income, occupation, marital status) or are difficult such as benefits sought (in a
product/serviceor lifestyle
2/ Sizeable- segment must consist of enough consumers to make targeting it profitable
-to measure segment size & profitability, marketers use secondary data & consumer surveys to estimate
buyers spending power and buying propensity
3/Stable/Growing- prefer to target consumer segments that are relatively stable in terms of lifestyles
and consumption patterns and likely to grow (avoid ‘fickle’ segments that are unpredictable)
4/ Accessible (reachable)- marketers must be able to reach market segment in an economical way
5/ Congruent with the marketer’s objectives & resources – not every company’s interested (or has
means) to reach every market segment, even if the segment reaches the other criteria
Bases for Market Segmentation:
Hybrid segmentation- includes attributes from two or more of the four quadrants
Consumer Rooted – stem from Consumption-Specific – stem from specific
consumers physical, social, & products or buying situations
psychological characteristics
Facts- determined from direct Empirical Personal Features Usage and Purchase Behaviours
questioning & categorized by -demographics( age, age cohorts, -usage rate
single objective measure, marital status, family life cycle, -usage situation/occasion
evidence based & can readily gender, income, education, -brand loyalty (behaviour component)
be determined & categorized occupation, social class) -psychographics-factual behaviour (lifestyle, leisure
along objective criterion -geographic location, address, & activities, hobbies, activities, interests and
geodemographics opinions (AIOS))
Personality Lifestyles & Attitudes & Preferences Regarding the Product
Cognitions - abstract, Sociocultural Values -benefits wanted
-personality traits -level of involvement
determined through complex
questioning, constructs -lifestyles, psychographics, and -awareness of product alternatives
measured have no single, VALS -brand loyalty – perceived commitment and level
universal definition -sociocultural values and beliefs of relationship
Demographic segmentation – (core of almost all segmentations)easiest, most logical way to classify people,
can be measured more precisely than other segment bases, most cost-effective way to locate & reach
specific segments (because most secondary data compiled about any population is based on demographics)
-many consumption behaviours, attitudes, &media exposure patterns are directly related to
demographics (ie. many products are gender specific, music preferences are related closely to one’s age)
-age, gender, marital status, family life cycle, income, ethnicity, income, occupation, education, etc. ●Age- key factor in marketing
Marketplace decision difficulty (MPDD) –typical of older, less educated females to make buying decisions
-largest age segment is baby boomers (1946-1964) and spend over $1trillino annually
●Gender – many products/services are inherently designed for males or females
●Marital status- traditionally families have been a main focus of marketing
●Family life cycle – based on that many family’s pass th
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