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.
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Steps in Market Segmentation, Targeting,
and Positioning
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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Consumer Desirability Criteria for PODs
RelevanceRelevance
DistinctivenessDistinctiveness
BelievabilityBelievability
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Deliverability Criteria for PODs
FeasibilityFeasibility
CommunicabilityCommunicability
SustainabilitySustainability
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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.