Market Segmentation and Targeting Strategies

Market Segmentation

Dividing a market into smaller segments with distinct needs, characteristics, or behaviors requiring separate marketing strategies.

Geographic Segmentation

Based on location (nations, regions, cities, etc.).

Demographic Segmentation

Based on age, gender, income, occupation, education, etc.

Age and Life-Cycle Stage Segmentation

Example: Personal care and real estate products.

Gender Segmentation

Example: Clothing and personal care products.

Income Segmentation

Example: Automobiles, clothing, and financial services.

Psychographic Segmentation

Based on social class, lifestyle, personality traits.

Behavioral Segmentation

Based on consumer knowledge, attitudes, uses, or responses.

Occasions

When consumers buy or use the product.

Benefits Sought

The major benefits consumers seek.

User Status

Nonuser, ex-user, potential user, first-time user, or regular user.

Usage Rate

Light, medium, or heavy.

Loyalty Status

Completely loyal, somewhat loyal, or not loyal.

Measurable

Can be quantified.

Accessible

Can be effectively reached.

Substantial

Profitable enough to serve.

Differentiable

Responds differently to marketing elements.

Actionable

Effective programs can be designed.

Market Targeting

Evaluating and selecting market segments to enter.

Target Market

A group of buyers with common needs a company decides to serve.

Undifferentiated Marketing

Targets the whole market with one offer.

Differentiated Marketing

Targets multiple segments with different offers.

Concentrated Marketing

Focuses on a large share of a smaller market.

Micromarketing

Tailors products to individuals or locations.

Product Position

How consumers define a product based on attributes.

Competitive Advantage

Providing more value through lower prices or benefits.

Criteria for Effective Differentiation

Importance, distinctiveness, superiority, communicability, preemptiveness, affordability, profitability.

Positioning Statement

"To (target segment and need), our (brand) is (concept) that (point of difference)."

Business Buyer Behavior

The behavior of organizations that purchase goods/services for production, resale, or supply.

Business Buying Process

Determining what products/services to purchase, evaluating options, and making decisions.

Fewer but larger buyers

Each represents a larger purchase volume.

Derived demand

Demand linked to consumer goods demand.

Inelastic demand

Less affected by price changes.

Fluctuating demand

More volatile than consumer demand.

Nature of the Buying Unit

Involves more participants, complex decisions, and formal processes.

Supplier Development

Establishing supplier partnerships to ensure a stable supply chain.

Straight Rebuy

Routine purchase without changes.

Modified Rebuy

Adjusting product specifications or suppliers.

New Task

Buying a product/service for the first time.

Systems Selling

Buying a complete solution from a single seller.

Buying Center Roles

Users, Influencers, Buyers, Deciders, Gatekeepers.

Users

Those who use the product or service.

Influencers

Help define specifications and provide evaluation information.

Buyers

Have authority to select suppliers and arrange terms.

Deciders

Have formal or informal power to approve final suppliers.

Gatekeepers

Control the flow of information.

Environmental Factors

Supply conditions, technological changes, competition, economic outlook.

Organizational Factors

Objectives, policies, procedures.

Interpersonal Factors

Authority, expertise, relationships.

Individual Factors

Age, education, job position, risk attitudes.

E-Procurement

Advantages: Lower costs, faster processing, better supplier access. Disadvantages: Reduces direct supplier relationships.

B-to-B Digital & Social Media Marketing

Engaging business customers through digital platforms.

Institutional Markets

Schools, hospitals, prisons, etc.

Government Markets

Favor domestic suppliers, require competitive bidding.

Consumer Markets

Individuals and households buying for personal consumption.

Culture

Values, perceptions, and behaviors learned from society.

Subcultures

Groups sharing similar values based on experiences.

Social Class

Society's divisions with shared behaviors.

Reference Groups

Influence attitudes/behavior.

Opinion Leaders

Influence due to skills, knowledge, or personality.

Family

Primary influence on buying decisions.

Occupation & Income

Affects purchasing behavior.

Lifestyle & Personality

Affects product choices.

Need Recognition

Identifying a need.

Information Search

Seeking information.

Alternative Evaluation

Comparing brands.

Purchase Decision

Choosing a brand.

Postpurchase Behavior

Satisfaction/dissatisfaction, cognitive dissonance.

Innovators

Risk-takers (2.5%).

Early Adopters

Thought leaders (13.5%).

Early Majority

More cautious, financially stable (34%).

Late Majority

Skeptical, lower social status (34%).

Lagging Adopters

Resistant to change (10%).

Product

Anything offered in a market to satisfy needs/wants.

Service

Intangible activities that provide value.

Industrial Products

Used in production or operations.

Convenience Products

Frequent purchases with minimal effort (e.g., candy, fast food).

Shopping Products

Compared for quality, price, and style (e.g., furniture, appliances).

Specialty Products

Unique products with strong brand identity (e.g., designer clothing, medical services).

Unsought Products

Not actively sought out (e.g., life insurance, funeral services).

Brand

Identifies the seller of a product.

Packaging

Designing containers or wrappers.

Labeling

Identifies, describes, and promotes products.

Product Line

Group of closely related products.

Product Mix

All products a company offers.

Brand Equity

The effect of brand awareness on consumer response.

Brand Value

The total financial worth of a brand.

Brand Sponsorship Types

Manufacturer's brand, private brand, licensed brand, co-branding.

Consumer Buyer Behavior

The buying behavior of final consumers—individuals and households that buy goods and services for personal consumption.

Consumer Markets

Made up of all the individuals and households that buy or acquire goods and services for personal consumption.

Culture

The set of basic values, perceptions, wants, and behaviors learned by a member of society from family and other important institutions.

Subcultures

Groups within a culture that share value systems based on common life experiences and situations.

Social Classes

Society's relatively permanent and ordered divisions whose members share similar values, interests, and behaviors.

Reference Groups

Groups that influence an individual's attitudes or behaviors directly or indirectly.

Word-of-Mouth Influence

The impact of personal words and recommendations of trusted friends, family, associates, and other consumers.

Influencer Marketing

Partnering with individuals who have influence over potential buyers.

Online Social Networks

Online communities where people socialize or exchange information and opinions.

Opinion Leaders

People who, due to special skills, knowledge, personality, or other characteristics, exert influence on others.

Family

The most important consumer-buying organization in society.

Occupation

Affects the goods and services bought by consumers.