7/28/2019 Market Segmentation and Segmentation Strategies
1/19
6 - 1
Market Segmentation and
Segmentation Strategies
A market segment is a specific group
of customers with unique customer
needs, purchase behaviors, and
identifying characteristics
7/28/2019 Market Segmentation and Segmentation Strategies
2/19
6 - 2
P = ProductM = Market
Single-segmentconcentration
P1
P2
P3
M1 M2 M3
ProductspecializationM1 M2 M3
P1
P2
P3
SelectivespecializationM1 M2 M3
P1
P2
P3
Selecting and Entering Market Segments
7/28/2019 Market Segmentation and Segmentation Strategies
3/19
6 - 3
P = ProductM = Market
Marketspecialization
P1
P2
P3
M1 M2 M3
Full marketcoverage
M1 M2 M3
P1
P2
P3
Selecting and Entering Market Segments
(cont)
7/28/2019 Market Segmentation and Segmentation Strategies
4/19
6 - 4
Seg C2
Seg C1
Segmentation Strategies
Seg B3
Seg B1
Seg B2
Mass
Market
SegmentA
Large
Segment
SegmentA
Segmen
tB
Adjacent
Segment
SegmentA
Segmen
tB
Seg C
Multi-
Segment
Seg C
Small
Segment
Seg C2
Niche
Segment
Seg A1
Seg A2
Seg A3
Seg A5
Seg A4
Mass
Custom-
ization
7/28/2019 Market Segmentation and Segmentation Strategies
5/19
6 - 5
Perceptual Map
. Meisterbrau
#8
N=15
Miller.
Regular Premium
Hearty
Light
. Budweiser
Schlitz .. Blatz
Pabst.Falstaff.Hamms .
#4
N=43
#5
N=32
#1
N=82
#3N=52
#2
N=79
#6
N=39
#7
N=30
7/28/2019 Market Segmentation and Segmentation Strategies
6/19
6 - 6
Forces that Shape Consumer
Market Needs
Age, gender, family
structure, income, socialclass, race & geography
1. Demographic
2. Lifestyle
Attitudes, values,
activities, interests
Segmentation is the Process of Dividing a Larger Marketinto Smaller Pieces Based on One or More Characteristics.
3. Usage
Quantity, time of use,frequency of use
7/28/2019 Market Segmentation and Segmentation Strategies
7/19
6 - 7
Region
Size of city, country or
standard metropolitan
statistical area
Population density
Climate
Pacific; Mountain; West North
Central; East North Central; East
South Central; South Atlantic;
Middle Atlantic; New England
Under 5,000; 5,000-19,999; 20,000-
49,999; 50,000-99,999; 100,000-
249,999; 250,000-499,999; etc
Urban, suburban, rural
Warm, cold
1. Geographic Segmentation
1. Demographic (Age, gender, family structure, income, social class, race & geography)
7/28/2019 Market Segmentation and Segmentation Strategies
8/19
6 - 8
Age
Gender
Family size
Income
Occupation
Under 6; 6-12; 13-19; 20-29; 30-39;
40-49; 50-59; 60+
Male; Female
1-2; 3-4; 5+ persons
Under $15,000; $15,000-$24,999;
$25,000-$34,999; $35,000-$49,999;
Over $50,000
Professional; craftspeople, foremen;farmers; retired; students;
homemakers; unemployed; etc...
1. Demographic Segmentation
7/28/2019 Market Segmentation and Segmentation Strategies
9/19
6 - 9
18-24 107 141 120 94 110 50 35 99
25-34 115 118 117 110 119 76 45 116
35-49 103 104 108 125 135 110 74 173
50-64 92 84 87 93 85 126 125 95
> 65 67 49 60 62 39 114 271 65
CarWax
Frozen
Yogurt
Pizza
Metal
Polish
Laxative
s
Diarrhea
Remedies
Beer, Ale
Male Female
PROPENSITY TO CONSUMEPRODUCTS BY AGE CATEGORY
7/28/2019 Market Segmentation and Segmentation Strategies
10/19
6 - 10
Sensory IndependentSegment Sociables Worriers Segment
Brands Colgate, Macleans, Crest Brands
Favored Stripe Plus White, on sale
Ultra Brite
Demo- Children Teens, Large Men
graphic Young families
Strengths people
Principal Flavor, Brightness Decay Price
Benefit Product of teeth prevention
Sought appearance
2. Lifestyles (Attitudes, values, activities, interests)
Interests: Benefit Segmentation of theToothpaste Market
7/28/2019 Market Segmentation and Segmentation Strategies
11/19
6 - 11
Work Family Themselves Age
Hobbies Home Social issues Education
Social events Job Politics Income
Vacation Community Business Occupation
Entertainment Recreation Economics Family size
Club membership Fashion Education Dwelling
Community Food Products GeographyShopping Media Future City size
Sports Achievements Culture Life cycle stage
Activities Interests Opinions Demographics
2. Lifestyles
Psychographic Categories
7/28/2019 Market Segmentation and Segmentation Strategies
12/19
6 - 12
BELIEVERS
ACHIEVERS EXPERIENCERS
STRIVERS MAKERS
Low Resources
High Resources
ActionOriented
StatusOriented
PrincipleO
riented
FULFILLEDS
STRUGGLERS
SRI Consultings Values andLifestyle System (VALSTM)
ACTUALIZERS
VALS2
7/28/2019 Market Segmentation and Segmentation Strategies
13/19
6 - 13
VALSTM SEGMENTPERCENT OF
POPULATION
Actualizer
10.5
11.7%
Struggler
Maker
Experiencer
Striver
Achiever
Believer
Fulfilled
9.5
12.0
12.9
11.8
14.7
17.0
Successful, sophisticated, active, high self-esteem, and
abundant resources
Mature, satisfied, comfortable people who value order,knowledge and responsibility
Conservative, conventional people with concrete beliefs
and strong attachments to traditional institutions
Successful career and work-oriented who control their
lives
Seek motivation, self-definition and approval from theworld around them
Young, vital, enthusiastic, impulsive and rebellious
Practical people who have constructive skills and value
self-sufficiency
Chronically poor, ill-educated, low skilled, withoutstrong social bonds
VALSTM Segment as Percent ofthe United States Population
7/28/2019 Market Segmentation and Segmentation Strategies
14/19
6 - 14
Media usage
Specific media usage
Payment method
Loyalty status
Usage rate
User status
Usage situation
Newspaper; magazine; TV; Internet
Sports I l lustrate; L ife; Cosmopoli tan
Cash; Visa; MasterCard; American
Express; checkNone; some; total
Light; medium; heavy
Nonuser; ex-user; current user;potential user
Work; home; vacation; commuting
Usage Segmentation
3. Usage (Quantity, time of use, frequency of use)
7/28/2019 Market Segmentation and Segmentation Strategies
15/19
6 - 15
Cola 22% 39% 39% 0% 10% 90%
Bourbon 59% 20% 21% 0% 11% 89%
Beer 67% 16% 17% 0% 12% 88%
Dog Food 67% 16% 17% 0% 13% 87%
RTE Cereal 4% 48% 48% 0% 13% 87%
Shampoo 18% 41% 41% 0% 19% 81%
Percentage of Population Volume
Non Light Heavy Non Light Heavy
Users Half Half Users Half Half
Heavy-Half Segmentation
7/28/2019 Market Segmentation and Segmentation Strategies
16/19
6 - 16
I like to play poker 18 37 41
I would rather spend a quiet evening
at home than go out to a party 67 53 44
I smoke too much 29 40 41
I would like to be a pro football player 10 15 21I would do better than average in
a fist fight 17 26 32
I go to church regularly 57 37 31
Beer is a real mans drink 9 16 44
Playboy is one of my favorite magazines 11 21 28
I am a girl watcher 33 47 54
Men are smarter than women 22 27 31
Non Light Heavy
Users Users Users
Percentage of AgreementMale Beer Drinkers
7/28/2019 Market Segmentation and Segmentation Strategies
17/19
6 - 17
Catsup Unmarried or married over Under 50, 3 or more 7.8
age 50 without children children
Consumption
Product Light Buyers Heavy Buyers Multiple
Beer Under 25 or over 50, Between 25 & 50, not 40.0
college educated, college grad, TV more
nonprofessional, TV less than 3.5 hours
than 2 hours
Candy Under 35, no children 35 or over, 3 or more 21.9
Bars children
Frozen Under 35 or over 65, College grads, 8.0
Orange not college grads, between 35 and 65
Juice 2 or fewer children
Usage Rates
7/28/2019 Market Segmentation and Segmentation Strategies
18/19
6 - 18
Forces that Shape Business
Market Needs
Firmographic Forces
Number of employees
Sales volume
Number of locations
Years in business
Financial situation
Business Culture
Business sophistication
Growth orientation
Innovativeness
Technology
Decision making
Usage Behaviors
Application
Quantity
Time of purchase
Frequency of purchase
Users
7/28/2019 Market Segmentation and Segmentation Strategies
19/19
6 - 19
Segments are largeenough to be profitable.
Large Enough?
Size and purchasing power
can be measured.Able to be Measured?
Members are similar, butdifferent from others
Similar, but Different?
Reachable? Marketing communications
can reach the segment.
Serve the Needs? Marketer can serve theneeds of the segment.
Targeting: Evaluating Market
Segments