Market Segmentation
Market Segmentation is pursuing a
marketing strategy whereby the total
potential market is divided into
homogeneous subsets of customers, each
of which responds differently to the
marketing mix of the organization.
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MARKETING MANAGEMENT MARKETING MANAGEMENT
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Market Segmentation
Market Segmentation is pursuing a marketing strategy whereby the total potential market is divided into homogeneous subsets of customers, each of which responds differently to the marketing mix of the organization.
Criteria for Effective Market
Segmentation
Substantiality – large enough to warrant attention
- Measurability – potential demand and purchasing power
- Accessibility – can reach segments with a variety of communications
- Actionability
Market Segmentation Decision
Process
Identify segmentation bases
- Develop profiles for each segment
- Forecast potential demand
- Select specific target market segments
Market Segmentation Strategies
Mass-market strategy – one product-services mix for all potential customers
- Differentiated strategy – more than one market segment with a separate marketing program for each
- Concentrated strategy – one (or a few) market segments with limited changes in the marketing program
Step1-Determine the ideal mix for
consumers
Table 4. Important Attributes for Hospitality and Travel Firms Type of Firm List of Attributes Restaurant Price, value, quality of food, type of food, service quality, menu variety, employee friendliness, location, atmosphere, speed of service, cleanliness, parking Hotel Price, value, room quality, restaurant quality, location, number and types of restaurants, other facilities (e.g., pool and fitness center), cleanliness, atmosphere, employee friendliness, speed of check-in and check-out, amenities (e.g., valet parking and room service), service quality Airline Price, value, service quality, employee friendliness, on- time performance, baggage handling, direct routes, cities served, scheduled flights, frequent flyer programs Rental Car Company Price. value, service quality, convenience, location, types of cars, condition of cars, speed of service, pick-up and drop- off policies
Step2- Measure consumer perceptions of
available services
- (^) Perceptual mapping - A technique used to construct a graphic representation of how consumers in a market perceive a competing set of products relative to each other Table 4.3 Competitive Benefit Matrix Potential benefits Our Operation Competitor A Competitor B Value for price Quality of food Quality of service Atmosphere Location Menu variety
Step4-Develop a strategy for obtaining
the desired position
Guidelines for Developing Positioning Strategies (^) What position do you own? (^) What position do you want? (^) Who must you outgun? (^) Do you have enough money? (^) Can you stick it out? (^) Do you match your position?
Market Segmentation Figure 4.1a. A Nonsegmented Market Figure 4.1b. (^) A Market Segmented by Age (A=18-34, B=35-49, C=above 49) Figure 4.1c. A Market Segmented by Income (H=high, M=moderate, L=low) Figure 4.1d. A Market Segmented by Age and Income H M L C B A CH CM BM AM BL AL
..^ . . . (^).. .. ..^ . . ..^. . . . ... .. ... .. ...
Figure 4.3. The Positioning Process Determine the ideal mix for consumers Measure consumer perceptions of available services Look for gaps in coverage and select a desired position Develop a strategy for obtaining the deisred position
High Perceived Price Four Seasons Hilton Sheraton Marriott Holiday Inn Low High Perceived Quality Hampton Inn Days Inn Econolodge Motel 6 Low Figure 4.4 Perceptual Map for Hotel Service © 2010 John Wiley & Sons, Inc.