The 80/20 rule is a concept that suggests 80 percent of a firm’s sales are obtained from
20 percent of its customers.
Slide 9-2
LO 9-1
WHY SEGMENT MARKETS?
WHAT MARKET SEGMENTATION MEANS
Market Segmentation
Market Segments
Product Differentiation
Segmentation: Linking Needs to Actions
The Zappos Segmentation Strategy
Slide 9-3
Market Segmentation
Market segmentation involves aggregating prospective buyers into groups, or segments, that
(1) have common needs and
(2) will respond similarly to a marketing action.
Slide 9-4
FIGURE 9-1 Market segmentation links market needs to an organization’s marketing program through marketing mix actions
Slide 9-5
Product Differentiation
Product differentiation is a marketing strategy that involves a firm using different marketing mix actions to help consumers perceive the product as being different and better than competing products.
Slide 9-6
FIGURE 9-2 A market-product grid shows the kind of sleeper that is targeted for each of the bed pillows with a different firmness
Using Market-Product Grids
Slide 9-7
Market-Product Grid
A market-product grid is a framework to relate the market segments of potential buyers to products offered or potential marketing actions.
Slide 9-8
LO 9-1
WHY SEGMENT MARKETS?
WHEN AND HOW TO SEGMENT MARKETS
One-Size-Fits-All Mass Markets
No Longer Exist
One Product and
Multiple Market Segments
Multiple Products and
Multiple Market Segments
Slide 9-9
LO 9-1
WHY SEGMENT MARKETS?
WHEN AND HOW TO SEGMENT MARKETS
Segments of One
• Mass Customization
• Build-to-Order (BTO)
Slide 9-10
FIGURE 9-3 The five key steps in segmenting and targeting markets that link market needs to a firm’s marketing program
Slide 9-11
LO 9-2
SEGMENTING AND TARGETING MARKETS
STEP 1: GROUP POTENTIAL BUYERS INTO SEGMENTS
Criteria to Use in
Forming the Segments
• Similarity of Needs of
Potential Buyers within a Segment
• Potential for Increased Profit
• Similarity of Needs of
Potential Buyers within a Segment
Slide 9-12
LO 9-2
SEGMENTING AND TARGETING MARKETS
STEP 1: GROUP POTENTIAL BUYERS INTO SEGMENTS
Criteria to Use in
Forming the Segments
• Difference of Needs of
Buyers Among Segments
• Potential of a Marketing Action to Reach a Segment
Slide 9-13
LO 9-3
SEGMENTING AND TARGETING MARKETS
STEP 1: GROUP POTENTIAL BUYERS INTO SEGMENTS
SEGMENTING AND TARGETING MARKETS
STEP 1: GROUP POTENTIAL BUYERS INTO SEGMENTS
Ways to Segment Consumer Markets
• Psychographic Segmentation (43%)
• Behavioral Segmentation (65%)
Product Features
Usage Rate or
Frequency Marketing
80/20 Rule
Slide 9-15
FIGURE 9-4 Segmentation bases, variables, and breakdowns for U.S. consumer markets
Slide 9-16
LO 9-3
MARKETING MATTERS
To Which “Flock” Do You Belong?
Slide 9-17
FIGURE 9-5 Patronage of fast-food restaurants by adults 18 years and older
Source: Experian Marketing Services Simmons Winter 2013 Full Year Adult Survey 12-Month OneView SM
Crosstabulation Report: Based on Visits within the Past 30 Days
Slide 9-18
FIGURE 9-6 Comparison of various kinds of users and nonusers for Wendy’s, Burger King, and McDonald’s fast-food restaurants
Source: Experian Marketing Services Simmons Winter 2013 Full Year Adult Survey 12-Month OneView SM
Crosstabulation Report: Based on Visits within the Past 30 Days
Slide 9-19
LO 9-3
SEGMENTING AND TARGETING MARKETS
STEP 1: GROUP POTENTIAL BUYERS INTO SEGMENTS
Variables to Use in Forming Segments
• Students
Dorms, Sororities,
& Fraternities
