CHAPTER SEGMENTATION, TARGETING, AND POSITIONING 08 Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin.

CHAPTER

SEGMENTATION, TARGETING, AND POSITIONING

08

Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

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LEARNING OBJECTIVES

Segmentation, Targeting, and Positioning

LO1 Identify the five steps in the segmentation, targeting and positioning process.

LO2 Outline the different methods of segmenting a market.

LO3 Describe how firms determine whether a segment is attractive and therefore worth pursuing.

LO4 Articulate the difference among targeting strategies: undifferentiated, differentiated, concentrated, or micromarketing.

LO5 Define positioning, and describe how firms do it.

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Victoria’s Secret

Photo by Duffy-Marie Arnoult/WireImage/Getty Images

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Segmentation, Targeting, Positioning Process

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Step 1: Establish Overall Strategy or Objectives

Check YourselfCheck YourselfDerived from mission and current state

Derived from mission and current state

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Step 2: Segmentation Methods

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Geographic Segmentation

©ImagineChina

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Demographic Segmentation

U.S. Census Bureau Website

©Stockbyte/Getty Images

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Balancing Act Career Moms

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Psychographic Segmentation

©Benetton Group SPA; Photo by: Oliviero Toscani

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VALS Website

VALS Framework

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Geodemographic Segmentation

Claritas Website

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State Farm Not Insuring Mississippi

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Benefit Segmentation

©image100/PunchStock©image100/PunchStock Michael Hevesy/Photodisc/Getty Images

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Behavioral Segmentation

Royalty-Free/CORBIS

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Check Yourself

1. What are the various segmentation methods?

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Step 3: Evaluate Segment Attractiveness

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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

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Substantial

• Too small and it is insignificant

• Too big and it might need it’s own store

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orb

is

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Reachable

©Digital Vision/PunchStock

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Responsive

Customers must:

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Profitable

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Profitable Segments

• Segment size = 60 million (<15 yrs)

• Segmentation Adoption Percentage = 35%

• Purchase Behavior = $500 x 1 time purchase

• Profit margin % = 10%

• Fixed Cost = $50M

Is this segment profitable?Is this segment profitable?

©Comstock/PunchStock

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Step 4: Selecting a Target Market

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

©M Hruby

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Segmentation Strategy

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Step 5: Develop Positioning Strategy

Photo by Tiffany Rose/WireImage/Getty Images

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Positioning

Green Giant for Business Wire via Getty Images

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Perceptual Maps

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Positioning Steps

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Check Yourself

1. What is a perceptual map?

2. Identify the five positioning steps.