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Identifying Market
Segments and
Targets

Discussion Questions
1. What are the different levels of market
segmentation?
2. In what ways can a company divide a
market into segments?
3. What are the requirements for effective
segmentation?
4. How should business markets be
segmented?
5. How should a company choose the most
attractive target markets?
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Target Marketing
Requirements

1. Identify and profile distinct

groups of buyers (market
segmentation).
2. Select one or more market
segments to enter (market
targeting).
3. For each, establish and
communicate benefits of offering
(market positioning).
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Bases for Segmenting

Consumers
Geographi
c

Demographi
c
Psychograp
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Behavioral
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Geographic Segmentation

Geoclustering

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Demographic Segmentation
Age and Life-cycle
Stage
Life Stage
Gender
Income
Generation
Race and Culture

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Age and Life-Cycle Stage

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Life Stage

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Gender
Women:
Influence 80% of consumer
purchases
Make 75% of new home
decisions
Purchase 60% of cars

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Income

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Generation
Gen X (1964-1978)
Baby Boomers (1946-1964)
Silent Generation (1925-1945)

Millennials (Gen Y)
(1979-1994)
-78 Million people
-$187 annual spending
power

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U.S. Generation Cohorts

Cohort
Millennials
(1979-1994)

Gen X
(1964-1978)

Baby
Boomers
(1946-1964)

Silent
Generation

Siz
e

Defining Features

78
m

Raised in affluence, tech savvy,

perceived immunity from
marketing

50
m

Parents relied on day care,

accepts diversity, pragmatic and
individualistic

76
m

Control 3/4th of the wealth in the

U.S, seek fountain of youth (hair
color, hair replacement), home
exercise equipment

42

Lead vibrant lives, spend money

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Race and Culture

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Multicultural Market Profile

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Psychographic
Segmentation
Personality
traits
Lifestyle
Values

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VALS Segmentation
System

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Behavioral Segmentation
Usage
occasions
User status
Usage rate
Buyer-readiness
Loyalty status

Decision Roles

User and
Usage

Needs and
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Brand Funnel

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Consumer Attitudes

Enthusias
tic

Positiv
e

Indiffere
nt

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Negati
ve

Hostil
e

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Behavioral
Segmentation

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Bases for Segmenting B2B

Markets
Demographic
Operating Variables
Purchasing
Approach
Situational Factors
Personal
Characteristics
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Industry, company size, location

Technology, user status, customer

capabilities
Power structure, nature of existing
relationship
Urgency, specific application, size of
order
Buyer-seller similarity, loyalty, risk
attitude
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Market Targeting
Effective Segmentation
Criteria
Measurable
Substantial
Accessible
Differentiable
Actionable

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Slide 22 of 26

Market Targeting
Porters Five Force

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Slide 23 of 26

Evaluating and Selecting

Segments
Multiple
segment
specialization
Full market
coverage
Singlesegment
concentratio

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Individual
marketing

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Levels of
Segmentation

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