IDENTIFYING MARKET SEGMENTS AND TARGETS

Carisse Diana A. Drilon

ASMPH MD-MBA

May 11, 2010

OUTLINE:

Why identify?

Levels of Market Segmentation

Segmenting Consumer Markets

Evaluating and Selecting Market Segments

WHY IDENTIFY?

Companies cannot connect with all customers in large, broad, or divers markets.

Mass marketing is no longer that effective Splintering of market advertising media distribution channels.

THE MARKET CAN BE SEGMENTED INTO 4 LEVELS:

Segment Marketing

Niche Marketing

Local Marketing

Individual Marketing: Customerization

CUSTOMERS WITH SIMILAR SET OF NEEDS AND WANTS : SEGMENT MARKETING

Marketer must identify the markets and decide which one to target

Kotler example: Siemens Electrical Apparatus

Division

Local Example: Cebu Pacific Airlines

Medical Application: The Medical City Breast Clinic

Concept 1

DEFINED CUSTOMER GROUP LOOKING FOR A DISTINCT MIX OF BENEFITS: NICHE MARKETING

Has a distinct set of needs, willing to pay a premium, fairly small, gains economies through specialization

Kotler example:Hallmark

Local example:VMV Hypoallergenics

Medical application:Subspecializing in a certain field

Concept 2

TAILORING TO NEEDS AND WANTS OF LOCAL GROUPS: LOCAL MARKETING

Emphasis on local marketing initiatives

Kotler example:Citibank

Local example:McDonald’s

Medical application:Private practice of doctors in different

areas

Concept 3

EMPOWERS CUSTOMERS TO DESIGN THE PRODUCT AND SERVICE: CUSTOMERIZATION

Firm provides a platform and tools and “rents” out to the customers the means to design the products.

Kotler example:JackRabbit Custom Bikes

Local example:Specialty bakeshops making custom-

designed cakes, etc.

Medical application:Patient care is individualized

Concept 4

SEGMENTING CONSUMER MARKETS

Geographic

Region, City or MetroSize, Density, Climate

Demographic

Age, Gender, Family size and Fife cycle, Race, Occupation, or Income ...

Lifestyle or Personality

Psychographic

Occasions, Benefits, Uses, or Attitudes

Behavioral

DIVIDING MARKET INTO GEOGRAPHICAL UNITS: GEOGRAPHIC SEGMENTATION

Can be divided into nations, states, regions, countries, cities, or neighborhoods

Kotler example:Bed Bath and Beyond

Local example:Jollibee

Medical application:Local health units

Concept 5

MARKET DIVIDED INTO GROUPS BASED ON VARIABLES: DEMOGRAPHIC SEGMENTATION

Variables such as age, family size, family life cycle, gender, income, occupation, education, religion, etc.

Kotler example:Dove’s Campaign for Real Beauty

Local example:Pond’s Age Defying Serum

Medical application:Age-specific specialization

(Pediatrics, Geriatrics, etc.)Gender specific specialization (OB-

Gyn, Urology, etc.)

Concept 6

DIVIDED BASED ON PSYCHOGRAPHIC PROFILES: PSYCHOGRAPHIC SEGMENTATION

Market is divided into different groups on the basis of psychological/personal traits, lifestyle, or values

Concept 7

Kotler example:Transport Canada

Local example:Philippine Airlines

Medical application:St. Luke’s Medical Center, Global City

BASED ON DECISION ROLES AND BEHAVIORAL VARIABLES: BEHAVIORAL SEGMENTATION

Divide market into groups on the basis of their knowledge of, attitude toward, use of, or response to a product

Concept 8

Kotler example:Cranberries

Local example:Queso de Bola

Medical application:Flu shot

EVALUATING AND SELECTING MARKET SEGMENTS

Selectivespecialization

M1 M2 M3

P1

P2

P3

M1 M2 M3

Full marketcoverage

P1

P2

P3

SELECTING A NUMBER OF MARKET SEGMENTS: SELECTIVE SPECIALIZATION

There may be little or no synergy among the segments, but each promises to be a moneymaker

Kotler example:Proctor and Gamble Crest White Strips

Local example:Swish Mouthwash

Medical application:Dermatology Clinic

Concept 9

SERVE ALL CUSTOMER GROUPS: FULL MARKET COVERAGE

Firm attempts to serve all customer groups with all the products they might need.

Kotler example:Coca-Cola

Local example:United Laboratories, Incorporated

Medical applicationBig hospitals (The Medical City, St. Luke’s

Medical Center, Makati Medical Center)

Concept 10

OUTLINE:

Why identify?

Levels of Market Segmentation

Segmenting Consumer Markets

Evaluating and Selecting Market Segments

IDENTIFYING MARKET SEGMENTS AND TARGETS

Carisse Diana A. Drilon

ASMPH MD-MBA

May 11, 2010