Copyright 1999 Prentice Hall 7-1 Chapter 7 PRINCIPLES OF MARKETING Eighth Edition Philip Kotler and Gary Armstron Market Segmentation, Targeting, and Positioning for Competitive Advantage
Copyright 1999 Prentice Hall
7-17-1
Chapter 7
Chapter 7
PRINCIPLES OF MARKETINGEighth Edition
Philip Kotler and Gary Armstrong
Market Segmentation, Targeting, and Positioningfor Competitive Advantage
Copyright 1999 Prentice Hall
7-27-2
Steps in Segmentation, Targeting, and PositioningSteps in Segmentation, Targeting, and Positioning
1. Identify Basesfor Segmenting the Market
2. Develop Profilesof Resulting Segments
3. Develop Measuresof Segment Attractiveness
4. Select TargetSegment(s)
5. Develop Positioningfor Each Target Segment
6. Develop MarketingMix for Each Target Segment Market
Positioning
MarketTargeting
Market Segmentation
Copyright 1999 Prentice Hall
7-37-3
Step 1. Market SegmentationLevels of Market SegmentationStep 1. Market SegmentationLevels of Market Segmentation
Mass MarketingSame product to all consumers
(no segmentation)
Mass MarketingSame product to all consumers
(no segmentation)
Segment MarketingDifferent products to one or more segments
(some segmentation)
Segment MarketingDifferent products to one or more segments
(some segmentation)
MicromarketingProducts to suit the tastes of individuals or locations
(complete segmentation)
MicromarketingProducts to suit the tastes of individuals or locations
(complete segmentation)
Niche MarketingDifferent products to subgroups within segments
( more segmentation)
Niche MarketingDifferent products to subgroups within segments
( more segmentation)
Copyright 1999 Prentice Hall
7-47-4
Step 1. Market SegmentationBases for Segmenting Consumer Markets
Step 1. Market SegmentationBases for Segmenting Consumer Markets
Geographic
DemographicAge, gender, family size and life cycle, or income
PsychographicSocial class, lifestyle, or personality
BehavioralOccasions, benefits, uses, or responses
Nations, states, regions or cities
Copyright 1999 Prentice Hall
7-57-5Using Multiple SegmentationBases: GeodemographicsUsing Multiple SegmentationBases: Geodemographics
Copyright 1999 Prentice Hall
7-67-6Step 1. Market SegmentationBases for Segmenting Business Markets
Step 1. Market SegmentationBases for Segmenting Business Markets
Basesfor Segmenting
BusinessMarkets
Basesfor Segmenting
BusinessMarkets
DemographicsPersonalCharacteristics
SituationalFactors
OperatingCharacteristics
PurchasingApproaches
Copyright 1999 Prentice Hall
7-77-7
Step 1. Market SegmentationBases for Segmenting International Markets
Step 1. Market SegmentationBases for Segmenting International Markets
Political/Legal
Political/Legal
Cultural Cultural IntermarketIntermarket
Economic EconomicGeographicGeographic
Industrial MarketsIndustrial Markets
Copyright 1999 Prentice Hall
7-87-8
Step 1. Market SegmentationRequirements for Effective Segmentation
Step 1. Market SegmentationRequirements for Effective Segmentation
• Size, purchasing power, profiles of segments can be measured.
• Segments must be effectively reached and served.
• Segments must be large or profitable enough to serve.
Measurable Measurable
AccessibleAccessible
SubstantialSubstantial
DifferentialDifferential
ActionableActionable
• Segments must respond differently to different marketing mix elements & actions.
• Must be able to attract and serve the segments.
Copyright 1999 Prentice Hall
7-97-9
Step 2. Market TargetingEvaluating Market Segments
Step 2. Market TargetingEvaluating Market Segments
• Segment Size and GrowthSegment Size and Growth– Analyze sales, growth rates and expected profitability.
• Segment Structural AttractivenessSegment Structural Attractiveness– Consider effects of: Competitors, Availability of Substitute
Products and, the Power of Buyers & Suppliers.
• Company Objectives and ResourcesCompany Objectives and Resources– Company skills & resources relative to the segment(s).
– Look for Competitive Advantages.
Copyright 1999 Prentice Hall
7-107-10
Step 2. Market TargetingMarket Coverage Strategies
Step 2. Market TargetingMarket Coverage Strategies
Segment 1Segment 1
Segment 2Segment 2
Segment 3Segment 3
Segment 1Segment 1
Segment 2Segment 2
Segment 3Segment 3
CompanyMarketing
Mix
CompanyMarketing
Mix
CompanyMarketing
Mix
CompanyMarketing
Mix
CompanyMarketing Mix 1
CompanyMarketing Mix 1
CompanyMarketing Mix 2
CompanyMarketing Mix 2
CompanyMarketing Mix 3
CompanyMarketing Mix 3
MarketMarket
A. Undifferentiated Marketing
B. Differentiated Marketing
C. Concentrated Marketing
Copyright 1999 Prentice Hall
7-117-11
Step 2. Market TargetingChoosing a Market-Coverage Strategy
Step 2. Market TargetingChoosing a Market-Coverage Strategy
Company Resources
ProductVariability
Product’s Stagein the Product Life Cycle
Market Variability
Competitors’Marketing Strategies
Copyright 1999 Prentice Hall
7-127-12
Step 3. Positioning for Competitive AdvantageStep 3. Positioning for Competitive Advantage
• Product’s Position Product’s Position - the place the product occupies in consumers’ minds relative to competing products; i.e. Volvo positions on “safety”.
• Marketers must:– Plan positions to give products the greatest advantage
– Develop marketing mixes to create planned positions
Copyright 1999 Prentice Hall
7-137-13
Step 3. Positioning for Competitive Advantage: StrategiesStep 3. Positioning for Competitive Advantage: Strategies
Against aCompetitor
Against aCompetitor
UsageOccasions
UsageOccasions
Away fromCompetitors
Away fromCompetitors
ProductAttributes
ProductAttributes
ProductClass
ProductClass
BenefitsOffered
BenefitsOffered
UsersUsers
BB
AA
EEDD
CCHHGG
FF
Copyright 1999 Prentice Hall
7-147-14Steps to Choosing and Implementing a Positioning Strategy
Steps to Choosing and Implementing a Positioning Strategy
• Step 1. Identifying a set of possible competitive advantages: Competitive Differentiation.
• Step 2. Selecting the right competitive advantage.
• Step 3. Effectively communicating adn delivering the chosen position to the market.
Copyright 1999 Prentice Hall
7-157-15
Developing Competitive DifferentiationDeveloping Competitive Differentiation
ProductProduct ServiceService
PersonnelPersonnel ImageImage
Areas for CompetitiveDifferentiation
Areas for CompetitiveDifferentiation
Copyright 1999 Prentice Hall
7-167-16Selecting the Right CompetitiveAdvantagesSelecting the Right CompetitiveAdvantages
Criteriafor
DeterminingWhich
Differencesto
PromoteAffordableAffordable SuperiorSuperior
ProfitableProfitable
PreemptivePreemptive
DistinctiveDistinctive
ImportantImportant
CommunicableCommunicable