SegmentationTargeting

Positioning

7

7- 2

Definition

Market Segmentation: Dividing a market into distinct

groups with distinct needs, characteristics, or behavior who might require separate products or marketing mixes.

7- 3

Steps in Market Segmentation, Targeting,

and Positioning

7- 4

Market Segmentation

Segmenting Consumer MarketsSegmenting Business MarketsSegmenting International MarketsRequirements for Effective Segmentation

Geographic segments

Demographic segmentation

Psychographic segmentation

Behavioral segmentation

Using multiple segmentation variables

Key Topics

7- 5

Market Segmentation

Segmenting Consumer MarketsSegmenting Business MarketsSegmenting International MarketsRequirements for Effective Segmentation

Geographical segmentation Marketing mixes are

customized geographically

Demographic segmentationPsychographic segmentationBehavioral segmentationUsing multiple segmentation variables

Key Topics

7- 6

Market Segmentation

Geographic Segmentation Variables

City or Metro Size

Neighborhood

Density

Climate

World Region or Country

Country Region

City

7- 7

Market Segmentation

Segmenting Consumer MarketsSegmenting Business MarketsSegmenting International MarketsRequirements for Effective Segmentation

Geographical segmentsDemographic segmentation Most popular type Demographics are closely

related to needs, wants and usage rates

Psychographic segmentationBehavioral segmentationUsing multiple segmentation variables

Key Topics

7- 8

Market Segmentation

Demographic Segmentation Variables

AgeGenderFamily sizeFamily life cycleIncomeEthnicity

OccupationEducationReligionGenerationNationality

7- 9

Market Segmentation

Segmenting Consumer MarketsSegmenting Business MarketsSegmenting International MarketsRequirements for Effective Segmentation

Geographic segmentsDemographic segmentation Psychographic segmentation Lifestyle, social class,

and personality-based segmentation

Behavioral segmentationUsing multiple segmentation variables

Key Topics

7- 10

Market Segmentation

Segmenting Consumer MarketsSegmenting Business MarketsSegmenting International MarketsRequirements for Effective Segmentation

Geographic segments

Demographic segmentation

Psychographic segmentation

Behavioral segmentation Typically done first

Using multiple segmentation variables

Key Topics

7- 11

Market Segmentation

Behavioral Segmentation Variables

Occasions

Benefits

User Status

User Rates

Loyalty Status

Readiness Stage

Attitude Toward the Product

7- 12

Market Segmentation

Segmenting Consumer MarketsSegmenting Business MarketsSegmenting International MarketsRequirements for Effective Segmentation

Demographic segmentation Industry, company size,

location

Operating variables Technology, usage status,

customer capabilities

Purchasing approaches

Situational factors Urgency, specific

application, size of order

Personal characteristics Buyer-seller similarity,

attitudes toward risk, loyalty

Key Topics

7- 13

Market Segmentation

Segmenting Consumer MarketsSegmenting Business MarketsSegmenting International MarketsRequirements for Effective Segmentation

Geographic segmentation Location or region

Economic factors Population income or level

of economic development

Political and legal factors Type / stability of

government, monetary regulations, amount of bureaucracy, etc.

Cultural factors Language, religion, values,

attitudes, customs, behavioral patterns

Key Topics

7- 14

Market Segmentation

Segmenting Consumer MarketsSegmenting Business MarketsSegmenting International MarketsRequirements for Effective Segmentation

Measurable Size, purchasing power, and

profile of segment

Accessible Can be reached and served

Substantial Large and profitable enough

to serve

Differentiable Respond differently

Actionable Effective programs can be

developed

Key Topics

7- 15

Target Marketing

Evaluating Market Segments Segment size and growth Segment structural attractiveness

Level of competition Substitute products Power of buyers Powerful suppliers

Company objectives and resources

7- 16

Target Marketing Strategies

Segmentation strategies

MARKETING MIXAll buyers in

1 segment

Undifferentiated

Segment 1

MARKETING MIX 3

MARKETING MIX 1

MARKETING MIX 2

MARKETING MIX 4

Segment 2

Segment 3

Segment 4

Differentiated

MARKETING MIX Segment 1

Concentrated/Micromarketing

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Target Marketing

Choosing a Target-Marketing Strategy Requires Consideration of: Company resources The degree of product variability Product’s life-cycle stage Market variability Competitors’ marketing

strategies

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Positioning

Positioning: The place the product

occupies in consumers’ minds relative to competing products.

Typically defined by consumers on the basis of important attributes.

Positioning Map

7- 23

Positioning

Choosing a Positioning Strategy: Identifying possible competitive

advantages -- many potential sources of differentiation exist: Products Services Channels People Image

Choosing a positioning Strategy

IDENTIFY COMPETITIVE ADVANTAGES

SELECT POSITIONING STRATEGY

CHOOSE RIGHT COMPETITIVE ADVANTAGE

Competitive advantage

Differentiation based on:

PRODUCT DISTRIBUTION

SERVICES PEOPLE IMAGE

7- 27

Positioning

Choosing a Positioning Strategy: Choosing the right competitive

advantage How many differences to promote?

• Unique selling proposition• Positioning errors to avoid

Which differences to promote?

Difference to promote should be:

IMPORTANT SUPERIORDISTINCTIVE

AFFORDABLE

COMMUNICABLE

PREEMPTIVE

PROFITABLE

7-21

Defining AssociationsPoints-of-

difference (PODs)

Attributes or benefits consumers strongly associate with a brand, positively evaluate, and believe they could not find to the same extent with a competitive brand

Points-of-parity

(POPs)

Associations that are not necessarily unique to the brand but may be shared with other brands

7-30

Consumer Desirability Criteria for PODs

RelevanceRelevance

DistinctivenessDistinctiveness

BelievabilityBelievability

7-31

Deliverability Criteria for PODs

FeasibilityFeasibility

CommunicabilityCommunicability

SustainabilitySustainability

7- 32

Positioning

Choosing a Positioning Strategy: Communicating and delivering the

chosen position Entire marketing mix must support the

chosen strategy May require changes to the product,

pricing, distribution or promotion.