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STP

Market segmentation
1. Identify bases for
segmenting the Target marketing
market. Market positioning
3. Develop measure of
2. Develop segment segment 5. Develop
profiles attractiveness positioning
(differentiation) for
4. Select target target segments.
segments.
6. Develop a
marketing mix for
each segment.
 Dividing a market into smaller groups of
buyers distinct needs, characteristics, or
behavior who might require separate
products or marketing mixes
 Buyers differ in
◦ Wants
◦ Resources
◦ Locations
◦ Buying attitudes
◦ Buying practices
 Through market segmentation,
companies divide large,
heterogeneous (different) markets
into smaller segments that can be
reached more efficiently and
effectively with products and services
that match their unique needs
 Buyers differ in
◦ Wants
◦ Resources
◦ Locations
◦ Buying attitudes
◦ Buying practices
 Through market segmentation,
companies divide large,
heterogeneous (different) markets
into smaller segments that can be
reached more efficiently and
effectively with products and services
that match their unique needs
1)Facilitates proper choice of tgt market
 Segmentation helps the marketer to distinguish one
customer group from another within a given market.
2)Adapting the offer to the target
 Segmentation also enables the marketer to crystallize
the needs of the target buyers.
Ex:Ford modifies its models for the Indian target
segment.
 Higher ground clearance to make the car more
compatible to the rougher road surface in India.
 Stiffer rear springs to enable negotiating
the potholes on Indian roads.
 Changes in cooling requirement with
greater airflow to the rear.
 Higher resistance to dust
 Comparability of engine with the quality of
fuel available in India
 Location of horn buttons on the steering
wheel
3)Makes the marketing effort more efficient &
economic
 Helps identify less satisfied segments and

concentrate them
4)Benefits the customer as well
 Dividing a market into different
geographical units such as nations, states,
regions, Metros, cities or neighborhoods
 Dividing the market into groups based
on demographic variables such as
age, gender, family size, family life
cycle, income, occupation, education,
religion, race and nationality
 Most popular because our needs,
wants and usage rates depend on the
demographics
 Dividing a market into different age
and life cycle groups
 Kids (corn flakes), adults, magazines
(teen stuff)

Gender segmentation
 Dividing a market into different groups
based on gender
 Clothing, cosmetics, perfumes
 Dividing the market into different
income groups
 Cars, financial services
 Dividing a market into different groups
based on social class, lifestyle or personality
characteristics
 Dividinga market into groups
based on consumer
knowledge, attitude, use, or
response to a product
 Occasion segmentation

◦ Dividing the market into


groups according to occasions
when buyers get the idea to
buy
 Benefit sought segmentation
◦ Dividing the market into groups
according to the different
benefits that consumers seek
from the product (detergent)
 Using multiple segmentation bases in an
effort to identify smaller, better defined
target groups
 Measurable
 Accessible
 Differentiable (segment is unique)
 Actionable (can perform marketing mix to
reach this segment)
• Size, purchasing power,
Measurable
Measurable profiles of segments can be
measured.
• Segments must be large or
Substantial
Substantial profitable enough to serve.

• Segments can be effectively


Accessible
Accessible reached and served.

• Segments must respond


Differential
Differential differently to different marketing
elements & actions.

• Must be able to attract and


Actionable
Actionable serve the
segments.
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 Ethical Choice of Market Targets

 Segment Interrelationships & Super-


segments

 Segment-by-Segment Invasion Plans

 Inter-segment Cooperation

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Market segmentation
1. Identify bases for
segmenting the
market. Target marketing
Market positioning
2. Develop segment 3. Develop measure of
profiles segment 5. Develop
attractiveness positioning
(differentiation) for
4. Select target target segments.
segments.
6. Develop a
marketing mix for
each segment.
 The process of evaluating each market
segment’s attractiveness and selecting one
or more segments to enter
 Segment size
 Growth
 Segment attractiveness
 Company objectives and resources
 Competitors
 Buying power
 Supplier power
 Target market
◦ A set of buyers sharing common needs or
characteristics that the company decides to serve
 Selecting the market segments
 Single segment concentration
 Selective specialization
 Product specialization
 Market specialization
 Full market coverage
Undifferentiated Concentrated (niche) Differentiation
Strategy Strategy Strategy
One marketing mix One marketing mix Two marketing mix
for the whole market and one segment and 2 different
BMW segment
TOI
Single-segment Selective Product
concentration specialization specialization
M1 M2 M3 M1 M2 M3 M1 M2 M3
P1 P1 P1
P2 P2 P2
P3 P3 P3
Market Full market
specialization coverage
M1 M2 M3 M1 M2 M3
P1 P1
P = Product
M = Market P2 P2
P3 P3
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Customer Groups
Airlines Railroads Truckers
Large
Product Varieties

computers

Mid-size
computers

Personal
computers

Company A Company B Company C

9-27 04/14/10
 Selecting the market segments
 Single segment concentration
 Selective specialization
 Product specialization
 Market specialization
 Full market coverage
Market segmentation
1. Identify bases for
segmenting the
market. Target marketing
Market positioning
2. Develop segment 3. Develop measure of
profiles segment 5. Develop
attractiveness positioning
(differentiation) for
4. Select target target segments.
segments.
6. Develop a
marketing mix for
each segment.
 The way that product is defined by
consumers on important attributes - the
place the product occupies in consumer’s
minds relative to competing products
Stylish, prestigious, distinctive

Mercedes 400SE
Volvo 850R • • Porsche 914 •
TM3 TM2
Chrysler LHS • • Lexus LS400
Buick Park Avenue • • Jeep Grand Cherokee
Oldsmobile L35 • • Acura Integra

Staid, Honda Accord • • Ford Taurus


Saturn SC2 •
Fun,
conservative, sporty,
older Nissan Sentra • fast

Plymouth Voyager • • TM1


Dodge Caravan • Honda Civic

Dodge Neon •
Geo Metro •
Kia Sephia •
Practical, common, economical
 Marketing mix: the set of controllable
tactical marketing tools: product, price,
place and promotion that the firm blends to
produce the response it wants in the target
market
 Differentiation is the act of designing a set
of meaningful differences to distinguish the
company’s offering from the competitor's
offering
 Product Differentiation:
 Form
 Feature
 Performance
 Durability
 Reliability
 Reparability
 Style
 Design
 Services
 Ordering ease
 Delivery
 Installation
 Customer training
 Customer consulting
 Maintenance & repair
 Miscellaneous
 Personal
 Competence
 Courtesy
 Credibility
 Reliability
 Responsiveness
 Communication
 Channel
 Coverage
 Expertise
 Performance
 Image
 Symbols
 Media
 Atmosphere

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