Essay on Market Segmantation, Targeting, and Positioning

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Slide 9-1

80/20 Rule

The 80/20 rule is a concept that suggests 80 percent of a firm’s sales are obtained from
20 percent of its customers.

Slide 9-2

LO 9-1

WHY SEGMENT MARKETS?
WHAT MARKET SEGMENTATION MEANS



Market Segmentation



Market Segments



Product Differentiation



Segmentation: Linking Needs to Actions



The Zappos Segmentation Strategy
Slide 9-3

Market Segmentation

Market segmentation involves aggregating prospective buyers into groups, or segments, that
(1) have common needs and
(2) will respond similarly to a marketing action.

Slide 9-4

FIGURE 9-1 Market segmentation links market needs to an organization’s marketing program through marketing mix actions

Slide 9-5

Product Differentiation

Product differentiation is a marketing strategy that involves a firm using different marketing mix actions to help consumers perceive the product as being different and better than competing products.

Slide 9-6

FIGURE 9-2 A market-product grid shows the kind of sleeper that is targeted for each of the bed pillows with a different firmness



Using Market-Product Grids
Slide 9-7

Market-Product Grid

A market-product grid is a framework to relate the market segments of potential buyers to products offered or potential marketing actions.

Slide 9-8

LO 9-1

WHY SEGMENT MARKETS?
WHEN AND HOW TO SEGMENT MARKETS



One-Size-Fits-All Mass Markets
No Longer Exist



One Product and
Multiple Market Segments



Multiple Products and
Multiple Market Segments
Slide 9-9

LO 9-1



WHY SEGMENT MARKETS?
WHEN AND HOW TO SEGMENT MARKETS

Segments of One
• Mass Customization

• Build-to-Order (BTO)

Slide 9-10

FIGURE 9-3 The five key steps in segmenting and targeting markets that link market needs to a firm’s marketing program

Slide 9-11

LO 9-2



SEGMENTING AND TARGETING MARKETS
STEP 1: GROUP POTENTIAL BUYERS INTO SEGMENTS

Criteria to Use in
Forming the Segments
• Similarity of Needs of
Potential Buyers within a Segment
• Potential for Increased Profit
• Similarity of Needs of
Potential Buyers within a Segment
Slide 9-12

LO 9-2



SEGMENTING AND TARGETING MARKETS
STEP 1: GROUP POTENTIAL BUYERS INTO SEGMENTS

Criteria to Use in
Forming the Segments
• Difference of Needs of
Buyers Among Segments
• Potential of a Marketing Action to Reach a Segment

Slide 9-13

LO 9-3



SEGMENTING AND TARGETING MARKETS
STEP 1: GROUP POTENTIAL BUYERS INTO SEGMENTS

Ways to Segment Consumer Markets
• Geographic Segmentation (88%)
• Demographic Segmentation (53%)

Slide 9-14

LO 9-3



SEGMENTING AND TARGETING MARKETS
STEP 1: GROUP POTENTIAL BUYERS INTO SEGMENTS

Ways to Segment Consumer Markets
• Psychographic Segmentation (43%)
• Behavioral Segmentation (65%)
 Product Features
 Usage Rate or
Frequency Marketing
 80/20 Rule
Slide 9-15

FIGURE 9-4 Segmentation bases, variables, and breakdowns for U.S. consumer markets

Slide 9-16

LO 9-3

MARKETING MATTERS
To Which “Flock” Do You Belong?

Slide 9-17

FIGURE 9-5 Patronage of fast-food restaurants by adults 18 years and older

Source: Experian Marketing Services Simmons Winter 2013 Full Year Adult Survey 12-Month OneView SM
Crosstabulation Report: Based on Visits within the Past 30 Days
Slide 9-18

FIGURE 9-6 Comparison of various kinds of users and nonusers for Wendy’s, Burger King, and McDonald’s fast-food restaurants

Source: Experian Marketing Services Simmons Winter 2013 Full Year Adult Survey 12-Month OneView SM
Crosstabulation Report: Based on Visits within the Past 30 Days
Slide 9-19

LO 9-3



SEGMENTING AND TARGETING MARKETS
STEP 1: GROUP POTENTIAL BUYERS INTO SEGMENTS

Variables to Use in Forming Segments
• Students
 Dorms, Sororities,
& Fraternities

 Day Commuters

 Apartments

 Night Commuters

• Nonstudents
 Faculty & Staff

 Workers in Area

 Residents in Area
Slide 9-20

LO 9-3

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