Strategic Marketing

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Strategic Marketing
Fall 2005
Tinker AFB Campus
Chapter Nine
Market Segmentation
Market Segmentation
Target marketing requires the following:
– identify and profile distinct groups of buyers with
distinct needs/preferences,
– select one or more market segments,
– establish and communicate distinctive benefits of
the market offering to each target segment.
Using Market Segmentation -
Buyers differ in many ways.
• Mass Marketing - One product/marketing mix
available for all buyers.
• Micro Marketing - The response to the decline
in favor for mass marketing.
• Segment marketing - A large identifiable
group within a market. Midpoint between mass
and individual marketing.

Using Market Segmentation - Buyers
differ in many ways (cont.)
• Niche Marketing - A narrowly defined smaller group
whose needs not currently met effectively.
• Local Marketing - Programs targeted to the needs and
wants of local customer groups.
• Individual Marketing - "One-to-One" Marketing
– Mass-customization and choice board
– Customerization - Empowering customers with the means
to design their own products.
Using Market Segmentation - Buyers
differ in many ways (cont.)
• Patterns of Market Segmentation - homogenous,
diffused, and clustered preferences
• Market Segmentation Process - survey, analysis, and
– Focus on needs-based market segmentation and market
• Effective Segmentation - Segments must be
measurable, substantial, accessible, differentiable,
and actionable.
Segmenting Consumer Markets
• Bases for Segmenting Consumer Markets:
– Geographic - nations, states, regions, counties,
cities, and neighborhoods
– Demographic - age and life cycle, gender, income,
generation, and social class.
– Psychographic - lifestyle, personality, and values
– Behavioral - purchase occasions, benefits, user
status, usage rate, loyalty status, buyer-readiness
stage, and attitude

Segmenting Consumer and Business
Markets (cont.)
• Bases for Segmenting Consumer Markets:
– Multiattribute Segmentation (geoclustering): Assumes
people who live near each other and exhibit similar traits
from all of the above segmentation bases.
– Targeting Multiple Segments - Because consumers no
longer can be neatly pigeonholed into one segment.
– Geoclustering via PRIZM clusters (American dreams, rural
industria, gray power, country squires) - Focus on
increasing diversity.
Segmenting Business Markets
• Bases for Segmenting Business Markets
• Based on their stage in the purchase decision
process and channel preferences.
• Types of buyers: programmed, relationship,
transaction, and bargain hunters
• Business buyer groups: price-oriented
(transactional selling), solution oriented
(consultative selling), and strategic value
(enterprise selling)
Market Targeting Strategies
• Evaluating and selecting the market segments.
– Factors: Segment size and growth, segment structural
attractiveness, company objectives, and resources.
– Single-Segment Concentration - Firm concentrates on
one market only for its one product.
– Selective Specialization - Firm selects a number of
attractive and appropriate segments and develops
products that appeal to each segment.
– Product Specialization - Firm focus is on a product it
can sell to several segments.

Market Targeting Strategies (cont.)
– Market Specialization - Firm satisfies multi-
faceted needs of one particular group.
– Full Market Coverage - Firm serves all customer
groups with products they might need.
• Undifferentiated Marketing - Entire market receives the
same program.
• Differentiated Marketing - Different programs for
different segments.
• Targeting Multiple Segments and Super
segments - use of mega marketing
Ethical Choice of Market Targets
Targeting sometimes generates controversy