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Market Segmentation and Targeting in Marketing

This document discusses market segmentation, targeting, and positioning. It defines market segmentation as dividing a market into smaller segments based on characteristics like geography, demographics, psychographics, and behavior. The document outlines the major steps in developing a customer-driven marketing strategy, including segmenting the market, evaluating segment attractiveness, and selecting target segments. It also discusses different forms of market targeting, differentiating offerings, developing a positioning statement, and delivering the chosen position.

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Kazima Khan
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53 views16 pages

Market Segmentation and Targeting in Marketing

This document discusses market segmentation, targeting, and positioning. It defines market segmentation as dividing a market into smaller segments based on characteristics like geography, demographics, psychographics, and behavior. The document outlines the major steps in developing a customer-driven marketing strategy, including segmenting the market, evaluating segment attractiveness, and selecting target segments. It also discusses different forms of market targeting, differentiating offerings, developing a positioning statement, and delivering the chosen position.

Uploaded by

Kazima Khan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Market Segmentation and

Targeting
Instructor Ms. Asia Shehbaz
BBA 6th
Section (C )
Customer-driven strategy 
Today, most companies moved from mass marketing to
target marketing: identifying market segments and
selecting a few to produce for. There are four major steps
in designing a customer-driven marketing strategy.
Market segmentation

Market segmentation means dividing a market into


smaller segments with the distinct needs, characteristics or
behavior that might require separate marketing strategies
or mixes. There are different ways to segment a market:
Geographic segmentation
Demographic segmentation
Psychographic segmentation
Behavioral segmentation:
Geographic segmentation
 Dividing a market into different geographical units, such
as nations, states, regions, counties, cities or even
neighborhoods.
Demographic segmentation
Dividing the market into different segments based on
variables such as age, gender, family size, family life
cycle, income, occupation education, religion, race,
generation and nationality. Age and life-cycle
segmentation is dividing a market into different age and
life-cycle groups. Gender segmentation means dividing a
market based on gender, while income segmentation
divides a market based on income levels.
Psychographic segmentation:
Dividing a market into different segments based on social
class, lifestyle or personality characteristics.
Behavioral segmentation
 Dividing a market into segments based on consumer
knowledge, attitudes, uses or responses to a product. This
can be done via occasion segmentation: dividing the
market according to occasions when buyers get the idea to
buy, actually making their purchase or use the purchased
items. Benefit segmentation: dividing the market
according to the benefits that customers seek from the
product. Markets can also be segmented based on user
states, usage rate and loyalty status.
Market targeting

Market targeting is the process of evaluating each


market segment’s attractiveness and selecting one or more
segments to enter. When evaluating segments, a marketer
must look at segment size and growth, segment structural
attractiveness and company objectives and resources. A
target market consists of a set of buyers sharing common
needs or characteristics that the company decides to serve.
There are several forms of market targeting.
Undifferentiated (mass) marketing
 A marketing coverage strategy in which a firm decides to
ignore market segment differences and go after the whole
market with one offer.
Differentiated marketing or segmented
marketing:
 A market-coverage strategy in which a firm decides to
target several market segments and designs separate offers
for each.
Concentrated marketing (niche):
  A market-coverage strategy in which a firm goes after
a large share of one or a few segments or niches.
Micromarketing
Micromarketing is tailoring products and marketing
programs to the needs and wants of specific individuals
and local customer segments. It includes local marketing:
tailoring brands and promotions to the need and wants of
local customer segments; cities, neighborhoods and even
specific stores. It also includes individual marketing:
tailoring products and marketing programs to the needs
and preferences of individual customers, also called one-
to-one marketing, customized marketing and markets-of-
one marketing.
Differentiation
Differentiation means differentiating the market offering to
create superior customer value.
To build profitable relationships, marketers must understand
customer needs. When a company is differentiated by
superior customer value, this can create a competitive
advantage: an advantage over competitors gained by
offering greater customer value, either by having lower prices
or providing more benefits that justify high prices. The
company can differentiate itself via product differentiation,
service differentiation, channel differentiation, people
differentiation or image differentiation.
Positioning
Positioning is arranging for a market offering to occupy a
clear, distinctive and desirable place relative to competing
products in the mind of target consumers. A product
position is the way the product is defined by consumers
on important attributes: the place the product occupies in
the consumers’ minds relative to competing products.
Perceptual positioning maps show consumer perceptions
of brands versus competing products.
Value Proposition
The value proposition is the full positioning of a brand: the full
mix of benefits on which it is positioned. There are multiple
possible value propositions, of which five can be “winning”:
1. More for more: upscale products and higher prices.
2. More for the same: used to attack competitors by offering
quality at a low price.
3. The same for less: a good deal.
4. Less for much less: a less optimal performance for a low price.
5. More for less: ultimately winning, but difficult to actually
achieve.
Positioning Statement
A positioning statement is a statement that summarizes
company or brand positioning. It takes this form: To
(target segment and needs) our (brand) is (concept) that
(point of difference). Once a position is chosen, a
company must take action to deliver and communicate the
position to its target customers.

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