Phillip Kevin Lane

Kotler Keller
Marketing Management 14e
 8
e r
p t
a
Ch

Identifying Market
Segments and
Targets
Discussion Questions
1. What are the different levels of market
segmentation?
2. In what ways can a company divide a
market into segments?
3. What are the requirements for effective
segmentation?
4. How should business markets be
segmented?
5. How should a company choose the most
attractive target markets?
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 Target Marketing
Requirements
1. Identify and profile distinct
groups of buyers (market
segmentation).

2. Select one or more market

segments to enter (market
targeting).

3. For each, establish and

communicate benefits of offering
(market positioning).

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Bases for Segmenting
Consumers

Geographi
c

Demographi
c

Psychograp Behavioral
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Geographic Segmentation

Geoclustering

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Demographic Segmentation

Age and Life-cycle

Stage
Life Stage
Gender
Income
Generation
Race and Culture

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Age and Life-Cycle Stage

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Life Stage

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Gender
Women:
Influence 80% of consumer
purchases
Make 75% of new home
decisions
Purchase 60% of cars

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Income

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Generation

Gen X (1964-1978)
Baby Boomers (1946-1964)
Silent Generation (1925-1945)

Millennials (Gen Y)
(1979-1994)
-78 Million people
-$187 annual spending
power

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U.S. Generation Cohorts
Cohort Siz Defining Features
e
Raised in affluence, tech savvy,
Millennials 78
perceived immunity from
(1979-1994) m
marketing
Parents relied on day care,
Gen X 50
accepts diversity, pragmatic and
(1964-1978) m
individualistic
Control 3/4th of the wealth in the
Baby 76 U.S, seek fountain of youth (hair
Boomers m color, hair replacement), home
(1946-1964)
exercise equipment
Silent 42 Lead vibrant lives, spend money
Generation
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Race and Culture

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Multicultural Market Profile

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Psychographic
Segmentation
Personality
traits
Lifestyle
Values

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 .1
8
u re VALS Segmentation
i g
F System

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Behavioral Segmentation
Usage
occasions
User status

Usage rate

Buyer-readiness

Loyalty status
Decision Roles User and
Usage

Needs and
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 .2
8
u re Brand Funnel
i g
F

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Consumer Attitudes

Enthusias Positiv Indiffere Negati Hostil

tic e nt ve e

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 .3
8
u re Behavioral
i g
F Segmentation

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Bases for Segmenting B2B
Markets
Demographic Industry, company size, location

Operating Variables Technology, user status, customer

capabilities

Purchasing Power structure, nature of existing

Approach relationship

Situational Factors Urgency, specific application, size of

order

Personal Buyer-seller similarity, loyalty, risk

Characteristics attitude

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Market Targeting

Effective Segmentation
Criteria
Measurable
Substantial
Accessible
Differentiable
Actionable

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 Market Targeting
Porters Five Force

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Evaluating and Selecting
Segments

Multiple
segment
specialization

Full market
coverage

Single-
segment Individual
concentratio
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 .4
8
u re Levels of
i g
F Segmentation

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