9-1© 2013 by McGraw-Hill Education.  This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.  This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

C H A P T E R

Segmentation, Targeting, and Positioning

9

McGraw-Hill/Irwin Copyright © 2014 by the McGraw-Hill Companies, Inc. All rights reserved.

9-2

L E A R N I N G O B J E C T I V E S

© 2014 by McGraw-Hill Education.  This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.  This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Outline the different methods of segmenting a market.

Describe how firms determine whether a segment is attractive and therefore worth pursuing.

Articulate the difference among targeting strategies: undifferentiated, differentiated, concentrated, or micromarketing.

Determine the value proposition.

Define positioning, and describe how firms do it.

Segmentation, Targeting, and Positioning

LO1

LO2

LO3

LO4

LO5

9-3© 2014 by McGraw-Hill Education.  This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.  This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Segmentation, Targeting, Positioning Process

Step 1 • Strategy or Objectives

Step 2 • Segmentation Methods

Step 3 • Evaluate Segment Attractiveness

Step 4 • Select Target Market

Step 5 • Identify and Develop Positioning Strategy

Segmentation

Targeting

Positioning

9-4© 2014 by McGraw-Hill Education.  This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.  This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Step 1: Establish Overall Strategy or Objectives

Check YourselfDerived from mission

and current state

©M. Hruby.

9-5© 2014 by McGraw-Hill Education.  This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.  This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Step 2: Segmentation Methods

9-6© 2014 by McGraw-Hill Education.  This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.  This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

CHECK YOURSELF

1. What are the various segmentation methods?

9-7© 2014 by McGraw-Hill Education.  This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.  This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Step 3: Evaluate Segment Attractiveness

SEGMENT ATTRACTIVENESS

Substantial

Reachable

ResponsiveProfitable

Identifiable

9-8© 2014 by McGraw-Hill Education.  This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.  This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Identifiable

Who is in their market?

Are the segments unique?

Does each segment require a unique marketing mix?

Liquidlibrary/Dynamic Graphics/Jupiterimages

Liquidlibrary/Dynamic Graphics/Jupiterimages

Comstock Images/JupiterImages

9-9© 2014 by McGraw-Hill Education.  This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.  This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Substantial

Too small and it is insignificant

Too big and it might need it’s own store

©Je

rry

Arc

ieri

/Co

rbis

9-10© 2014 by McGraw-Hill Education.  This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.  This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Reachable

Know the product exists

Understand what it can do

Recognize how to buy

©Digital Vision/PunchStock

9-11© 2014 by McGraw-Hill Education.  This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.  This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Responsive

React positively to firm’s offering

Move toward the firms products/services

Accept the firm’s value proposition

Customers must:

9-12© 2014 by McGraw-Hill Education.  This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.  This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Profitable

9-13© 2014 by McGraw-Hill Education.  This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.  This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Step 4: Selecting a Target Market

Conde Nast has more than 20 niche magazines focused on different aspects of life.

©M Hruby

9-14© 2014 by McGraw-Hill Education.  This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.  This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Segmentation Strategy

Targeting Strategies

Differentiated

Concentrated

Micromarketingor

one-to-one

Undifferentiated ormass marketing

9-15© 2014 by McGraw-Hill Education.  This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.  This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Step 5: Develop Positioning Strategy

• Value• Salient Attributes• Symbol• Competition

Positioning Methods

Photo by Tiffany Rose/WireImage/Getty Images

9-16© 2014 by McGraw-Hill Education.  This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.  This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Positioning Steps

1. Determine consumers’ perceptions and evaluations in relation to competitors’.

2. Identify the market’s ideal points and size.

3. Identify competitors’ positions.

4. Determine consumer preferences.

5. Select the position.

6. Monitor the positioning strategy.

9-17© 2014 by McGraw-Hill Education.  This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.  This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

CHECK YOURSELF

1. What is a perceptual map?

2. Identify the six positioning steps.