3. Mass Marketing vs. Target
Marketing
Mass Marketing is when
almost the same product
is used for promotion and
distribution for all
customers
Target Marketing is a
practice to identify and
segment the market and
develop products and
marketing mixes for each
segment or group of
customers
4. Marketing Segmentation
Marketing
Segmentation is:
* A process of dividing the
market into distinct
groups of customers
according to their
needs, characteristics,
or behaviors
* A compromise between
mass marketing and
target marketing
5. Marketing Segmentation
Market Segmentation Market Targeting Market Positioning
1. Identify bases for 3. Develop Measures 5. Develop positioning
segmenting the market of segment or each target segment
attractiveness
2. Develop profiles of 4. Select the target 6. Develop marketing mix
resulting segments segment(s) for each target segment
6. Goals of Segmentation
The two main goals that any segmentation methodology should be able to
address are:
1) At a strategic level, segmentation should be able to help an
organization rapidly evaluate new business opportunities
Geographical expansion: Should the retail chain expand to north east?
Product expansion: Should the electronic manufacturer launch a
smartphone?
2) At an operational level segmentation should yield information to help
craft successful marketing offers for specific prospects.
Product: What product features are must haves vs. nice to haves?
Price: What is the price point that customers are willing to pay?
Communication: How to message to the target customers?
Distribution: Where do the target customers live?
7. Levels of Market Segmentation
Mass Marketing
Segmenting Markets
Niche Marketing
Micromarketing
No Segmentation Complete Segmentation
Mass Marketing Segmenting Markets Niche Marketing Micromarketing
8. Mass Marketing
Traditional marketing
strategy that uses no
segmentation
strategies, and uses the
same product,
promotion, and
distribution to reach a
wide audience (whole
market)
Promotes the concept
“One Size Fits All”
9. Problems with Mass Marketing
Low production cost
->lower prices -> higher
margins
Nevertheless, it is hard
to appeal to all diverse
groups, more
competitors, and
proliferation of mass
media has made it hard
to further practice “one
size fits all” approach
10. Segmenting Markets
Companies that are segmenting markets realize the diversity
of the needs, perceptions, and buyer behavior between the
customers
So that they match the needs of the customer’s more
efficiently, improve and promote products for a distinct
segment of the market
A good segmenting approach will eliminate the competitors
11. Niche Marketing
Niche Marketers focus
on the subgroups within
the segments of the
market, seeking to find
customers with a
distinctive set of traits
looking for the same
combination of benefits
13. Micromarketing
A form of target marketing in which
companies fit their marketing mixes to
specific needs and wants of narrowly defined
geographic, demographic, psychographic or
behavioral segments
15. Geographic Segmentation
Geographic segmentation divides the market
into different geographical units: nations,
states, regions, countries, cities, or
neighborhoods
17. Demographic Segmentation.
Lifestyle groups
Yuppie Associations
Mobile
High valued house/flat
Good Salary
Young branded car
Third Agers
Associations
50's
Retired early from
profession.
Time to spare
Adventure Seekers
23. Behavioral Segmentation
Divides the market into segments based on
buyers’ knowledge, attitude, uses, responses
to the product
Occasions
Benefits Sought
Usage rate
Loyalty status
Buyer Readiness Stage
Attitude towards the product
24. Market Segmentation
NIVEA Sun Case Study
NIVEA sun products – sun care
Segmentation Geographically: targeted at different
climates and to users with different skin types
Demographic Segmentation: men/women and adults
with children. There is a stark contrast between
awareness and usage of sun care products between
men (who prefer convenience) and women (who enjoy
more luxurious sun care products)
Usage occasion (when) - e.g. holiday, outdoor sports,
gardening, working etc. NIVEA provides a variety of
SPF's for differing needs and occasions
Benefit sought - convenience is important to men (so
they choose spray applicators). Parents want to
provide maximum protection for children (high SPFs
and coloured products are therefore important)