Chapter 8: Identifying Market Segments and Targets

Name the four major segmentation variables and explain what they measure.
Geographic - geographical units such as nations, states, regions, counties, cities, or neighborhoods.
Demographic - variables such as age, family size, family life cycle, gender, income, occupation, education, religion, race, gender, nationality, and social class.
Psychographic - divides groups on the basis of psychological/personality traits, lifestyle, or values.
Behavioral - divides buyers into groups on the basis of their knowledge of, attitude toward, use of, or response to a product.
To be useful, market segments must rate favorable on five key criteria. Discuss these.
Market segments must be:
Measurable - in size, purchasing power and characteristics of the segments.
Substantial - large and profitable enough to serve.
Accessible - the segments can be effectively reached and served.
Differentiable - the segments are conceptually distinguishable and respond differently to different marketing-mix elements and programs.
Actionable - effective programs can be formulated for attracting and serving the segments.
Name and describe the four "brand loyalty groups".
Hard-core loyals - consumers who buy only one brand all the time.
split loyals - consumers who are loyal to two or three brands.
shifting loyals - consumers who shift loyalty from one brand to another.
switchers - consumers who show no loyalty to any brand.
Discuss the five patterns of target market selection a company might consider.
Single-segment concentration - concentrate on small market.
Selective specialization - firm selects a number of segments, each objectively attractive and appropriate.
Product specialization - the firm makes a certain product that it sells to several different market segments.
Market specialization - the firm concentrates on serving many needs of a particular customer group.
Full market coverage - the firm attempts to serve all customer groups with all the products they might need.