MKTG 8 Chapter 8 Market Segmentation, Targeting, and Positioning The Role of Market Segmentation • Market Segmentation: division of total market into smaller, relatively homogenous groups • Criteria for Effective Segmentation • Depends on four basic criteria: 1. Market segment must present measurable purchasing power and size 2. Marketers must find a way to promote effectively and to serve the market segment 3. Marketers must then identify segments that are sufficiently large to give them good profit potential 4. The firm must aim for segments that match its marketing capabilities Segmenting Consumer Markets • Market segmentation attempts to isolate the traits that distinguish a certain group of consumers from the overall market • Helps to develop a successful marketing strategy • Four common bases for segmenting consumer markets: 1. Geographic segmentation 2. Demographic segmentation 3. Psychographic segmentation 4. Product-related segmentation Geographic Segmentation • Division of an overall market into homogeneous groups based on their locations • Helps to identify patterns based on a location • Must look at economic variables, job growth, household incomes, and migration patterns • Government classified urban data into the following categories 1. Census Metropolitan Area (CMA) Geographic area surrounding an urban core with a population of at least 100,000 Largest classification 2. Census Agglomeration (CA) Geographic area with a population over 10,000 Smaller than CMA • Core Region: region from which major brands get 40-80% of their sales • Geographic Information Systems (GIS) Are computer systems that assemble, store, manipulate, and display data by their location Demographic Segmentation • Division of an overall market into homogeneous groups based on variables such as gender, age, income, occupation, education, sexual orientation, household size, and stage in the family cycle • Can be very stereotypical • Segmenting by Gender
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- Spring '11
- Marketing, psychographic segmentation, demographic segmentation, Demographic Segmentation Abroad