Professional Documents
Culture Documents
Identifying market
segments and selecting
Targeting markets
Definitions of Segmentation
and Targeting
A niche is attractive if –
• customer in the niche have a distinct set of needs
• they will pay premium to the firm
• do not attract other competitors
• has size, profit and growth potential
Levels of market segmentation
Demographic segmentation
Age, gender, income, occupation, education,
religion
Psychographic segmentation
Lifestyle, and personality
Behavioral segmentation
Occasions, benefits, user state, user rate, loyalty
status, readiness stage, attitude toward product.
Geographic segmentation
Operating Variable
Technology, User-nonuser status, Customer capabilities
Purchasing Approaches
Purchasing-function organization, power structure, Nature of
existing relationships, General purchase policies,Purchasing criteria
Situational Factors
Urgency, Specific application, Size of order
Personal Characteristics
Buyer-seller similarities, Attitude towards risk, Loyalty
Market Targeting
Target market: A target market consists of a set of buyers
who share common needs or characteristics that the
company decides to serve.
Evaluating Market Segments
Segment Size and Growth: Analyze sales, growth rates
and expected profitability.
Segment Structural Attractiveness: Consider effects of
Competitors, Availability of Substitute Products and, the
Power of Buyers & Suppliers.
Company Objectives and Resources: Company skills &
resources relative to the segment(s). Look for Competitive
Advantages.
Market Targeting (cont.)
M1 M2 M3
P1
P2
P3
M1 M2 M3
P1
P2
P3
P1
P2
P3