chapter 9 market segmentation, targeting, and positioning principles of contemporary marketing kurtz...
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Chapter 9Market Segmentation,
Targeting, and Positioning
Principles of
Contemporary MarketingKurtz & Boone
CHAPTER 9 Market Segmentation, Targeting, and Positioning
Chapter Objectives
1. Identify the essential components of a market.
2. Outline the role of market segmentation in developing a marketing strategy.
3. Describe the criteria necessary for effective segmentation.
4. Explain the geographic approach to segmenting consumer markets.
5. Discuss the demographic approach to segmenting consumer markets.
Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.
CHAPTER 9 Market Segmentation, Targeting, and Positioning
Chapter Objectives
6. Outline the psychographic approach to segmenting consumer markets.
7. Describe product-related segmentation.
8. Identify the steps in the market segmentation process.
9. Discuss the four basic strategies for reaching target markets.
10. Summarize the types of positioning strategies, and explain the reasons for positioning and repositioning products.
Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.
CHAPTER 9 Market Segmentation, Targeting, and Positioning
o Consumer products - Products bought by ultimate consumers for personal use
o Business products - Goods and services purchased for use either directly or indirectly in the production of other goods and services for resale
Types of Markets
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CHAPTER 9 Market Segmentation, Targeting, and Positioning
o Marketing strategies must be adjusted to meet the needs of different consumer groups
o Market segmentation - Division of the total market into smaller, relatively homogenous groups
The Role of Market Segmentation
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CHAPTER 9 Market Segmentation, Targeting, and Positioning
o Geographic segmentation
o Demographic segmentation
o Psychographic segmentation
o Product-related segmentation
Segmenting Consumer Markets
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CHAPTER 9 Market Segmentation, Targeting, and Positioning
o Division of an overall market into homogenous groups based on their locations
o Marketers look at total population, a variety of economic variables, geographic indicators, and migration patterns to determine market size
o Pay close attention to areas with quickly growing populations to plan for the future
Geographic Segmentation
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CHAPTER 9 Market Segmentation, Targeting, and Positioning
o Government now classifies urban data using several categories:o Core based statistical area (CBSA)
o Metropolitan statistical area (MSA)
o Micropolitan statistical area
o Consolidated metropolitan statistical area (CMSA)
o Primary metropolitan statistical area (PMSA)
Geographic Segmentation
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CHAPTER 9 Market Segmentation, Targeting, and Positioning
o Division of an overall market into homogenous groups based on variables such as gender, age, income, occupation, education, sexual orientation, household size, and stage in the family life cycle
Demographic Segmentation
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CHAPTER 9 Market Segmentation, Targeting, and Positioning
o Average household size in U.S. has decreased from 5.8 in 1790 to less than 3 today
o Households vary by lifestage and the presence or absence of children
o Growing number of same-sex couples who share households
Segmenting by Household Type
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CHAPTER 9 Market Segmentation, Targeting, and Positioning
o Engel’s lawso As household income increases:
o A smaller percentage of expenditures goes for food
oThe percentage spent on housing, household operations, and clothing remains constant
oThe percentage spent on recreational and educational items increases
Segmenting by Income and Expenditure Patterns
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CHAPTER 9 Market Segmentation, Targeting, and Positioning
o One source of global demographic information is the International Programs Center (IPC) at the U.S. Census Bureauo IPC provides a searchable online database
of population statistics for many countries on the Census Bureau’s Web page
o Private marketing research firms can supplement government data
Demographic Segmentation Abroad
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CHAPTER 9 Market Segmentation, Targeting, and Positioning
o Division of a population into groups that have similar attitudes, values, and lifestyles
o AIO statements - Items on lifestyle surveys that describe various activities, interests, and respondents’ opinions
What is Psychographic Segmentation?
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CHAPTER 9 Market Segmentation, Targeting, and Positioning
Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.
CHAPTER 9 Market Segmentation, Targeting, and Positioning
o Division of a population into homogeneous groups based on their relationships to a product
o Segmenting by benefits sought
o Segmenting by usage rates
o Segmenting by brand loyalty
o Using multiple segmentation bases
Product-Related Segmentation
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CHAPTER 9 Market Segmentation, Targeting, and Positioning
o Develop a relevant profile for each segment
o Forecast market potential
o Forecast probable market share
o Select specific market segments
The Market Segmentation Process
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CHAPTER 9 Market Segmentation, Targeting, and Positioning
o Undifferentiated marketingo Strategy that focuses on producing a single
product and marketing it to all customers; also called mass marketing
o Differentiated marketingo Strategy that focuses on producing several
products and pricing, promoting, and distributing them with different marketing mixes designed to satisfy smaller segments
Strategies for Reaching Target Markets
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CHAPTER 9 Market Segmentation, Targeting, and Positioning
o Focusing marketing efforts on satisfying a single market segment; also called niche marketing
o Approach can appeal to small firms or to firms that offer highly specialized goods and services
o Example: Peanut Butter & Co, which appeals to peanut butter lovers
o Can backfire if competitors target the same niche or if market decreases
Concentrated Marketing
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CHAPTER 9 Market Segmentation, Targeting, and Positioning
o Basic determinants of marketing strategy:o Company resources
o Product homogeneity
o Stage in the product lifestyle
o Competitors’ strategies
Selecting and Executing a Strategy
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CHAPTER 9 Market Segmentation, Targeting, and Positioning
o Placing a product at a certain point or location within a market in the minds of prospective buyers
o Possible approaches o Attributes
o Price/quality
o Competitors
o Application
o Product user/class
Positioning
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