University of Technical Education

University of Sunderland

Chapter 6

HO CHI MINH CITY 2009

OUTLINE
1- Market segmentation
2- Segmenting consumer
markets
3- Segmenting industrial markets
4- Positioning products
and brands

1- Market segmentation
Definition
Market segmentation is the subdividing
of a market into distinct and
increasingly homogeneous subgroups of
customers, where any subgroup can
conceivably be selected as a target market
to be met with a distinct marketing mix
(Kotler, 1994)
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Segment selection

Target marketing

Product positioning
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Requirements for effective market

segmentation
Measurability
Measurability

Accessibility
Accessibility

Substantiality
Substantiality
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Market segmentation

Segmentation variables
Demographic segmentation
Geographic segmentation
Psychographic and life style
segmentation
Behavioural segmentation
Next
Next

 Geographic - for example, region, urban /

suburban / rural, population density;
Demographic - for example, age, sex,
marital status, socio-economic status,
social class, religion; education;
Psychographic - for example, lifestyles,
personality, self-image, value perceptions,
motives;
Behavioural - for example, usage rate
and volume, occasions when used, brand
loyalty, benefits sought.
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The benefits of segmentation

Improved customer relations
Accurate marketing mix
Resource allocation
Competitor analysis
Strategic marketing planning
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Evaluating segment attractiveness

Can the segment be measured?
Is the segment big enough?

Criteria

Can the segment be reached?

Do segments respond differently?
Can the segment be reached profitably?
Is the segment suitably stable?

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Market segment attractiveness

Current and potential company

strengths in serving the segment

Market segment attractiveness

Weak
Average

Unattractive

Average

Attractive

Strongly avoid

Avoid

Possibilities

Avoid

Possibilities

Secondary targets

Possibilities

Secondary targets

Prime targets

Strong
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Segment selection

Target marketing

Product positioning

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Target markets
Definition
A target market is a market or
segment
selected for special
attention by am
organisation
(possibly served with a
distinct
marketing mix).

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Undifferentiated

Targetmarket
marketpolicy
policyoptions
options
Target

Concentrated marketing

Differentiated marketing
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2- Segmenting consumer
markets
Segmentation by location
Segmentation by demography
Segmentation by benefits
Product usage segmentation
Social status and social class
Family life cycle
Psychographics and culture
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3- Segmenting industrial markets

By location
Customer size
Usage rates
Industry classification
Product use

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Segment selection

Target marketing

Product positioning
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4- Positioning products and

brands
Positioning is the act of designing the
companys offer and image so that it
offers a distinct and valued place in the
target customers mind.

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Perceptual map
High price

Cowboy
Brands

Premium
Brands

Low quality

High quality
Bargain
Brands

Economy
Brands

Low price
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Questions
1. What is market segmentation?
2. What are the main benefits of market segmentation to
marketers?
3. What demographic factors determine social class?
4. What are the relevant factors within
socio-economic groups that aid segmentation?
5. What cultural factors may be used as segmentation
variables?
6. Why are cross-cultural factors becoming more important
to marketers?
7. What are the main components of the psychographic
variables?
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