Copyright © 2012 McGraw-Hill Ryerson Limited Ajax Persaud Shirley Lichti Dhruv Grewal Michael Levy Week Five Segmentation Targeting and Positioning
Dec 21, 2015
Copyright © 2012 McGraw-Hill Ryerson Limited
Ajax Persaud Shirley Lichti
Dhruv Grewal Michael Levy
Week Five
SegmentationTargeting and Positioning
7-2
Chapter Objectives
LO1 Describe the STP process
LO2 Describe the bases marketers use to segment a market
LO3 Discuss the criteria for determining the attractiveness of a segment and whether it is worth pursuing (targeting)
LO4 Explain how a firm decides what type of segmentation strategy to use: undifferentiated, differentiated, concentrated, or micromarketing
LO5 Explain what positioning is and describe how do firms do it
LEARNING OBJECTIVES
7-3
Chapter Roadmap
7-4
Coke Zero
“Real Men” didn’t want diet drinks Segment of men who wanted a lower
calorie beverage Very successful new product launch
7-5
Segmentation Targeting Positioning Process
LO1
7-6
Step 1: Establish Overall Strategy or Objectives
Consistent with mission statement
Derived from mission and current state
LO1
7-7
Step 2: Profile Segments
Segmentation Base
Sample Segments
Geographic Country, province, city, urban, rural, climate
Continent: North America, Asia, Europe, Africa
Region: Atlantic, Central, Western Canada
Demographic Age, gender, income, education, occupation, ethnic background, religion, family life cycle, etc.
Psychographic Lifestyles, Values, Personality, Self Concept
Behavioural Benefits sought, Usage rates, User status, Loyalty
LO2
7-8
Geographic Segmentation
Divide market into separate geographic units
Countries, regions provinces, cities, neighbourhoods, climate, etc.
Develop appropriate marketing programs
LO2
7-9
Geographic segmentation is most useful for companies whose products satisfy needs that vary by __________.
A) genderB) regionC) age D) nationality
Test Your Knowledge
7-10
Demographic Segmentation
Most common method Divide market into groups
based on:– gender– age – ethnic group– family lifecycle stage– household type– income – Other, e.g. occupation,
education, religion Census excellent source of
segmentation data Statistics Canada Census data
LO2
7-11
Psychographic Segmentation
How consumers
describe themselves
Self-values
Self-concept
Lifestyles
LO2
7-12
VALS Framework
VALS Website
LO2
7-13
Behavioural Segmentation
LO2
7-14
Using Multiple Segmentation Methods
LO2
7-15
Which of the following tools is widely used for geodemographic segmentation?
A) PRISMB) LSAT C) GNP D) LIMRA
Test Your Knowledge
7-16
How can geodemographic segmentation be used to help consumers find the perfect place to live?
Finding a Place to Live
LO2
7-17
Case in Point: Neighborhood Scout
Challenge
Answer
Results
To help homebuyers find the perfect neighborhood for their needs.
Use geodemographic segmentation to identify the neighborhoods that most closely match their needs and wants.
A patented neighborhood search engine with 70,000 subscribers and more than 1 million people who have used the service.
LO2
7-18
LO2
7-19
Step 3: Evaluate Segment Attractiveness
LO3
7-20
Identifiable
Who is in their market? Are the segments unique? Does each segment require a unique marketing mix?
Discussion question
When would these women all be in the same segment? When would they be in different segments?
LO3
7-21
Reachable
LO3
7-22
Responsive
React positively to firm’s offering
Move toward the firm’s products/services
Accept the firm’s value proposition
Customers must:
LO3
7-23
Substantial and Profitable
Size matters
Too small and segment is insignificant, not profitable
Growth potential equally important
LO3
7-24
• Segment size = 60 million (<15 yrs)
• Segmentation Adoption Percentage = 35%
• Purchase Behavior = $500 x 1 time purchase
• Profit margin % = 10%• Fixed Cost = $50M
Profitable Segments
Is this segment profitable?Is this segment profitable?
LO3
7-25
Which of the following factors would be most useful in determining whether or not a product will be profitable?
A) the region where the consumer lives B) the inflation rate C) the defection rateD) the speed of the distribution factors
Test Your Knowledge
7-26
Step 4: Selecting a Target Market
You are a marketing manager for a denim company and need to choose a target market for a new line of jeans.
Both the consumers pictured wear jeans.
How do you choose?
LO4
7-27
Segmentation Strategy
LO4
7-28
Which of the following products is most likely to use an undifferentiated segmentation strategy?
A) shoes B) jewellery C) cereal D) flour
Test Your Knowledge
7-29
Step 5: Identify and Develop Positioning Strategy
LO5
7-30
Positioning strategies generally focus on either how the product or service affects the consumer or how it is _______________.
A) better than the previous year’s product line B) advertised on the InternetC) better than competitors’ products and services D) positioned relative to the company mission
statement
Test Your Knowledge
7-31
Value
• The relationship of price to quality• Different consumers = different value
Meet Grandpa Tony, now retired: He knows the price of everything he has
ever bought. He clips the newspaper coupons. He goes to multiple stores to get the best
price. He is willing to pay more for quality. He trusts brand names.
LO5
7-32
Product Attributes
Focus on the attributes that are most important
Vary by target market
Meet Selia, first year student.
Reasons for her college choice: Close to home. Good academic reputation. Good financial aid package. Did we mention cute guys?
LO5
7-33
Benefits and Symbolism
LO5
7-34
Competition
Position against an
entire product classification
Position against a specific
competitor
LO5
7-35
Market Leadership
May emphasize their leadership position within their industry.
7-36
Positioning by Using Perceptual Mapping
When developing a positioning strategy, firms go through 5 important steps
Perceptual Map : Displays, in two or more dimensions, the position of products or brands in the consumer’s mind.
The position of each brand is denoted by a small circle, and the numbered asterisks denote consumers’ Ideal points (Where a particular market segment’s ideal product would lie on the map
7-37
Positioning Steps
LO5
7-38
Perceptual Maps
LO5
7-39
Repositioning
Whirlpool: New design Surf detergent: New message Elizabeth Arden: New faces YM: New audience Gallo: New image Aqua Velva: New packaging Arm & Hammer: New uses
LO5