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    Principles of Marketing

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    ZAINAB MALIK
    Segmentation divides potential customers into groups based on common characteristics to better understand their needs, while targeting determines which customer segments are most attractive and profitable to focus marketing efforts on. Common segmentation approaches include demographics, behaviors, and firmographics, and an ideal target segment is large, profitable, and can be effectively reached. Targeting influences how a company shapes its marketing mix for different elements like product, price, place and promotion tailored to each targeted customer segment.

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    Principles of Marketing

    Uploaded by

    ZAINAB MALIK
    69 views17 pages
    Segmentation divides potential customers into groups based on common characteristics to better understand their needs, while targeting determines which customer segments are most attractive and profitable to focus marketing efforts on. Common segmentation approaches include demographics, behaviors, and firmographics, and an ideal target segment is large, profitable, and can be effectively reached. Targeting influences how a company shapes its marketing mix for different elements like product, price, place and promotion tailored to each targeted customer segment.

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    Related to principles of segmentation and targeting

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    Segmentation divides potential customers into groups based on common characteristics to better understand their needs, while targeting determines which customer segments are most attractive and profitable to focus marketing efforts on. Common segmentation approaches include demographics, behaviors, and firmographics, and an ideal target segment is large, profitable, and can be effectively reached. Targeting influences how a company shapes its marketing mix for different elements like product, price, place and promotion tailored to each targeted customer segment.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    69 views17 pages

    Principles of Marketing

    Uploaded by

    ZAINAB MALIK
    Segmentation divides potential customers into groups based on common characteristics to better understand their needs, while targeting determines which customer segments are most attractive and profitable to focus marketing efforts on. Common segmentation approaches include demographics, behaviors, and firmographics, and an ideal target segment is large, profitable, and can be effectively reached. Targeting influences how a company shapes its marketing mix for different elements like product, price, place and promotion tailored to each targeted customer segment.

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    of 17

    Segmentation and

    Targeting
    Principles of Marketing
    Segmentation
    and Targeting
    Segmentation is the
    process of dividing
    potential customers into
    groups to better
    understand them

    Targeting is determining
    which segments are most
    likely to become
    customers and directing
    marketing efforts to best
    satisfy them
    Five Criteria for a Market

    1. There must be a true need and/or want for the product,


    service, or idea; this need may be recognized,
    unrecognized, or latent
    2. The person/organization must have the ability to pay for
    the product via means acceptable to the marketer
    3. The person/organization must be willing to buy the
    product
    4. The person/organization must have the authority to buy
    the product
    5. The total number of people/organizations meeting the
    previous criteria must be large enough to be profitable for
    the marketer
    Objectives of Segmentation

    • To improve an organization’s understanding of who


    their prospective customers are and how to serve them
    • To reduce risk in deciding where, when, how, and to
    whom a product, service, or brand will be marketed
    • To increase marketing efficiency by directing effort
    toward designated segment(s) in ways that are
    consistent with that segment’s characteristics
    Practice Question

    What products or
    companies would find
    this market
    segmentation by
    family life stage
    useful?
    Choosing a Target Market

    The target market should include only those segments of


    a market that are both:
    • Profitable to serve
    • Likely to be receptive to the products a company
    provides
    Common Market Segmentation
    Approaches
    Type of
    Segmentation Criteria
    Approach
    Nations, states, regions, cities, neighborhoods,
    Geographic
    zip codes, etc.
    Age, gender, family size, income, occupation,
    Demographic
    education, religion, ethnicity, and nationality

    Psychographic Lifestyle, personality, attitudes, and social class

    User status, purchase occasion, loyalty,


    Behavioral
    readiness to buy

    Decision maker Decision-making role (purchaser, influencer, etc.)


    Common Business Segmentation
    Approaches
    • Organization size: by revenue, number of employees,
    geographic reach, etc.
    • Geography
    • Industry
    • User status: usage frequency, volume used, loyalty,
    longevity, products already in use, readiness to buy,
    etc.
    • Benefits sought
    • End use
    • Purchasing approaches
    Combining Bases for Segmentation

    • Geo-cluster approach demographic + geographic data


    • Geographic + behavioral data
    • Can point companies toward locations where customers are
    clustered
    • Demographic + lifestyle or behavioral segments
    Sample Market Segment Profile
    Ideal Market Segment

    1. Can be measured
    2. Is profitable
    3. Is stable
    4. Is reachable
    5. Is internally homogeneous
    6. Is externally heterogeneous
    7. Is responsive
    8. Is cost-effective
    9. Helps determine the marketing mix
    Questions to Consider in Selecting a
    Target Segment
    • Whose needs can you best satisfy?
    • Who will be the most profitable customers?
    • Can you reach and serve each target segment
    effectively?
    • Are the segments large and profitable enough to
    support your business?
    • Do you have the resources available to effectively
    reach and serve each target segment?
    Targeting Strategy

    Concentration Multi-segment
    • Only one marketing mix is • Marketing mix for each
    developed segment
    • Advantage: focus • Advantage: may reach
    • Disadvantage if demand in more customers
    segment declines, • Disadvantage: Costs of
    company will suffer multiple campaigns and
    distribution channels
    Targeting Strategies

    Strategy Target Market Example

    Mass marketing Everybody everywhere Target

    Differentiated Large groups within the


    Costco, Sam’s Club
    marketing total market
    High penetration within
    Niche Trader Joe’s, Whole
    smaller, specialized
    marketing Foods
    segments
    Individual customers or
    Micromarketing Groupon
    localized microsegments
    The Marketing Mix
    Shaping Marketing Mix for Target
    Markets
    Marketing
    Targeting Criteria
    Element
    Product What would make the ideal product for your target segment?
    What special features or capabilities are critical for this
    segment?
    What unique problems does your product help them solve?
    Promotion What are the best ways to get your target segment’s
    attention?
    What do you want this segment to remember about your
    product?
    Place / Where does this segment look or shop for your product?
    Distribution What is the best way to get your product to your target
    customers?
    Price What price(s) are your target customers willing to pay?
    How much is too expensive? How much is too cheap?
    Quick Review

    • What is the purpose of segmentation and targeting in


    marketing?
    • What are some common segmentation approaches?
    • How do businesses select an appropriate segmentation
    approach and decide which customer segments to
    target for marketing activities?
    • How does targeting influence each element of the
    marketing mix?

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