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8/4/2019 Pres MK MN
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Philip KOTLER TRADITIONAL viewon Market Segmentation
To satisfy effectively customer needs, companiesneed to identify the market segments they canserve, they cannot connect with all customers
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BASES OF MARKETSEGMENTATION
1. Geographic Segmentation: divide market intogeographic units like nation, regions, cities and payattention to local variation
2. Demographic characteristics: age, occupation,gender, income
3. Psychographic: personality, values, lifestyle
4. Behavioural: consumer knowledge and attitudetowards a product
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Behavioral Segmentation
Aware
Ever tried
Recent trial
Occasional user
Regular user
Most often used
Brand variation Brand loyalty
Switchers
Shifting loyals
Split loyals
Hard-core
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EFFECTIVE SEGMENTATIONCRITERIA
Size, purc
hasing power, profilesof segments can be measured.
Segments must be effectively
reached and served. Segments must be large orprofitable enough to serve.
Mea
Ac
ce
ss
i
Su
bst
ant
Dif
fer
en
Ac
tiona
Segments must responddifferently to different marketing mixelements & actions. Must be able to attract and serve thesegments.
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LIMITATIONS
Targeting multiplesegments canincrease marketingcost
Limits generalpopularity for aproduct
Increased costs todevelop variations ofthe product
Benefits
Products offered fit morewith customer specificneeds
Company can offer betterdesign, price, disclose and
deliver the product orservice
Company can use moreefficient marketingresources
Company can betterunderstand thecompetitive environment
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Rachel Kennedy and Andrew Ehrenberg (2001): There is BrandSegmentation!
Different brands appeal to different people: => Countlesssegmentation studies=> Research and marketing expenses=> Marketers encouraged ?=> Company limited to small niche
ButSimilar brands to appeal to similar people !
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Competitive brands : are bought by very similar client basesbrand level segmentation is slight or non-
existent
Rachel Kennedy andAndrew Ehrenberg
Research :
Based on BMRB InternationalsTGI
For 42 varied Industries in UK TGI continuous self completion
survey, TGI-based on 25000 adults
annually
Respondents
state :
Buy /use /serve thecategory?
How often? Which specific brands?
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Theresults :
Individual brands percentagedeviation = 2-3%
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Theresults :
The average MAD for all demographicmedia :
Pinpoints the lack of deviation between
brands !
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Advantages:
No restriction to a specific market No limitation to a small niche
Sales increase No market segmentation research
expensesDisadvantages :
Large mass market => more direct
competitors Competitive products are usuallysubstitutable
More important Logistics than productitself
NOSegmentation
Whats next? Marketers still need to publicise and sell
their brand Marketers can help a brand to stand out
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