Post on 19-Dec-2015
Segmentation, Segmentation, Targeting, and Targeting, and
PositioningPositioning
Chapter 8Chapter 8
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Objectives
Be able to define the three steps Be able to define the three steps of target marketing: market of target marketing: market segmentation, target marketing, segmentation, target marketing, and market positioning.and market positioning.
Understand the major bases for Understand the major bases for segmenting consumer and segmenting consumer and business markets.business markets.
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Objectives
Know how companies identify Know how companies identify attractive market segments attractive market segments and how they choose a target and how they choose a target marketing strategy.marketing strategy.Comprehend how companies Comprehend how companies position their products for position their products for maximum competitive maximum competitive advantage.advantage.
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Sells multiple brands Sells multiple brands within the same within the same product category for product category for a variety of productsa variety of productsBrands feature a Brands feature a different mix of different mix of benefits and appeal benefits and appeal to different segmentsto different segments
Has also identified Has also identified different niches different niches withinwithin certain segments certain segments
Tide offers seven Tide offers seven different product different product formulations to serve formulations to serve different niches’ different niches’ needsneeds
cProcter & GambleProcter & Gamble
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Definition
Market Segmentation:Market Segmentation: Dividing a market into distinct Dividing a market into distinct
groups with distinct needs, groups with distinct needs, characteristics, characteristics, or behavior who or behavior who might require might require separate products separate products or marketing or marketing mixes.mixes.
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Figure 8-1:
Steps in Market Segmentation, Targeting,
and Positioning
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Market Segmentation
Segmenting Segmenting Consumer MarketsConsumer MarketsSegmenting Segmenting Business MarketsBusiness MarketsSegmenting Segmenting International MarketsInternational MarketsRequirements for Requirements for Effective SegmentationEffective Segmentation
Geographical segmentationGeographical segmentation Marketing mixes are Marketing mixes are
customized geographicallycustomized geographically
Demographic segmentationDemographic segmentationPsychographic Psychographic segmentationsegmentationBehavioral segmentationBehavioral segmentationUsing multiple Using multiple segmentation variablessegmentation variables
Key TopicsKey Topics
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Market Segmentation
Geographic Geographic Segmentation VariablesSegmentation Variables
City or City or Metro SizeMetro Size
NeighborhoodNeighborhood
DensityDensity
ClimateClimate
World Region World Region or Countryor Country
U.S. RegionU.S. Region
StateState
CityCity
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Geographical climate is Geographical climate is a legitimate means of a legitimate means of segmentation for many segmentation for many products or services.products or services.
Name several examples of Name several examples of products for which need products for which need (and demand) would vary (and demand) would vary on a geographical basis. on a geographical basis.
Discussion Question
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Market Segmentation
Segmenting Segmenting Consumer MarketsConsumer MarketsSegmenting Segmenting Business MarketsBusiness MarketsSegmenting Segmenting International MarketsInternational MarketsRequirements for Requirements for Effective SegmentationEffective Segmentation
Geographical segmentsGeographical segmentsDemographic segmentationDemographic segmentation Most popular typeMost popular type Demographics are closely Demographics are closely
related to needs, wants and related to needs, wants and usage ratesusage rates
Psychographic Psychographic segmentationsegmentationBehavioral segmentationBehavioral segmentationUsing multiple Using multiple segmentation variablessegmentation variables
Key TopicsKey Topics
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Market Segmentation
Demographic Demographic Segmentation VariablesSegmentation Variables
AgeAgeGenderGenderFamily sizeFamily sizeFamily life cycleFamily life cycleIncomeIncomeRaceRace
OccupationOccupationEducationEducationReligionReligionGenerationGenerationNationalityNationality
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What type of demographic segmentation is reflected by this ad?
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Market Segmentation
Segmenting Segmenting Consumer MarketsConsumer MarketsSegmenting Segmenting Business MarketsBusiness MarketsSegmenting Segmenting International MarketsInternational MarketsRequirements for Requirements for Effective SegmentationEffective Segmentation
Geographic segmentsGeographic segmentsDemographic Demographic segmentation segmentation Psychographic Psychographic segmentationsegmentation Lifestyle, social class, and Lifestyle, social class, and
personality-based personality-based segmentationsegmentation
Behavioral segmentationBehavioral segmentationUsing multiple Using multiple segmentation variablessegmentation variables
Key TopicsKey Topics
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Swatch targets those with an active lifestyle
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Market Segmentation
Segmenting Segmenting Consumer MarketsConsumer MarketsSegmenting Segmenting Business MarketsBusiness MarketsSegmenting Segmenting International MarketsInternational MarketsRequirements for Requirements for Effective SegmentationEffective Segmentation
Geographic segmentsGeographic segments
Demographic Demographic segmentation segmentation
Psychographic Psychographic segmentationsegmentation
Behavioral segmentationBehavioral segmentation Typically done firstTypically done first
Using multiple Using multiple segmentation variablessegmentation variables
Key TopicsKey Topics
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Market Segmentation
Behavioral Behavioral Segmentation VariablesSegmentation Variables
OccasionsOccasions
BenefitsBenefits
User StatusUser Status
User RatesUser Rates
Loyalty StatusLoyalty Status
Readiness StageReadiness Stage
Attitude Toward Attitude Toward the Productthe Product
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Occasion segmentation: Altoids’ “Love Tin” is a “curiously strong valentine”
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Checkout Direct offers retailers & manufacturers an excellent method of reaching segments of heavy users, as well as users of the direct competition.
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Market Segmentation
Segmenting Segmenting Consumer MarketsConsumer MarketsSegmenting Segmenting Business MarketsBusiness MarketsSegmenting Segmenting International MarketsInternational MarketsRequirements for Requirements for Effective SegmentationEffective Segmentation
Geographic segmentsGeographic segments
Demographic Demographic segmentation segmentation
Psychographic Psychographic segmentationsegmentation
Behavioral segmentationBehavioral segmentation
Using multiple Using multiple segmentation variablessegmentation variables PrizmPrizm
Key TopicsKey Topics
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Visit PRIZM’s “You are Visit PRIZM’s “You are where you live” where you live” website.website.
Enter the zip code(s) of Enter the zip code(s) of your choice. your choice.
Were you Were you surprised by surprised by what you what you found? found?
Discussion Question
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Market Segmentation
Segmenting Segmenting Consumer MarketsConsumer MarketsSegmenting Segmenting Business MarketsBusiness MarketsSegmenting Segmenting International MarketsInternational MarketsRequirements for Requirements for Effective SegmentationEffective Segmentation
Demographic segmentationDemographic segmentation Industry, company size, locationIndustry, company size, location
Operating variablesOperating variables Technology, usage status, Technology, usage status,
customer capabilitiescustomer capabilities
Purchasing approachesPurchasing approaches
Situational factorsSituational factors Urgency, specific application, Urgency, specific application,
size of ordersize of order
Personal characteristicsPersonal characteristics Buyer-seller similarity, attitudes Buyer-seller similarity, attitudes
toward risk, loyaltytoward risk, loyalty
Key TopicsKey Topics
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Market Segmentation
Segmenting Segmenting Consumer MarketsConsumer MarketsSegmenting Segmenting Business MarketsBusiness MarketsSegmenting Segmenting International MarketsInternational MarketsRequirements for Requirements for Effective SegmentationEffective Segmentation
Geographic segmentationGeographic segmentation Location or regionLocation or region
Economic factorsEconomic factors Population income or level of Population income or level of
economic developmenteconomic development
Political and legal factorsPolitical and legal factors Type / stability of government, Type / stability of government,
monetary regulations, amount of monetary regulations, amount of bureaucracy, etc.bureaucracy, etc.
Cultural factorsCultural factors Language, religion, values, Language, religion, values,
attitudes, customs, behavioral attitudes, customs, behavioral patternspatterns
Key TopicsKey Topics
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Market Segmentation
Segmenting Segmenting Consumer MarketsConsumer MarketsSegmenting Segmenting Business MarketsBusiness MarketsSegmenting Segmenting International MarketsInternational MarketsRequirements for Requirements for Effective SegmentationEffective Segmentation
MeasurableMeasurable Size, purchasing power, and Size, purchasing power, and
profile of segmentprofile of segment
AccessibleAccessible Can be reached and served Can be reached and served
SubstantialSubstantial Large and profitable enough to Large and profitable enough to
serveserve
DifferentiableDifferentiable Respond differentlyRespond differently
ActionableActionable Effective programs can be Effective programs can be
developeddeveloped
Key TopicsKey Topics
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Target Marketing
Evaluating Market SegmentsEvaluating Market Segments Segment size and growthSegment size and growth Segment structural attractivenessSegment structural attractiveness
Level of competitionLevel of competition Substitute productsSubstitute products Power of buyersPower of buyers Powerful suppliersPowerful suppliers
Company objectives and resourcesCompany objectives and resources
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Figure 8-2:
Target Marketing Strategies
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Target Marketing
Choosing a Target-Choosing a Target-Marketing Strategy Marketing Strategy Requires Consideration of:Requires Consideration of: Company resourcesCompany resources The degree of product variabilityThe degree of product variability Product’s life-cycle stageProduct’s life-cycle stage Market variabilityMarket variability Competitors’ marketing Competitors’ marketing
strategiesstrategies
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Target Marketing
Socially Responsible Targeting Socially Responsible Targeting Some segments are at special risk:Some segments are at special risk:
ChildrenChildren Inner-city Inner-city
minority minority consumers consumers
Internet Internet shoppers shoppers
Controversy occurs when the methods Controversy occurs when the methods used are questionable.used are questionable.
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Positioning
Positioning:Positioning: The place the product The place the product
occupies in occupies in consumers’ minds consumers’ minds relative to competing relative to competing products.products.
Typically defined by Typically defined by consumers on the consumers on the basis of important basis of important attributes.attributes.
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Positioning
Choosing a Positioning Strategy:Choosing a Positioning Strategy: Identifying possible competitive Identifying possible competitive
advantages -- many potential advantages -- many potential sources of differentiation exist:sources of differentiation exist: ProductsProducts ServicesServices ChannelsChannels PeoplePeople ImageImage
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Porsche is positioned on the basis of performance and freedom.
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Positioning
Choosing a Positioning Strategy:Choosing a Positioning Strategy: Choosing the right competitive Choosing the right competitive
advantageadvantage How many differences to promote?How many differences to promote?
• Unique selling propositionUnique selling proposition• Positioning errors to avoidPositioning errors to avoid
Which differences to promote?Which differences to promote?
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Positioning
Criteria for Meaningful DifferencesCriteria for Meaningful Differences
ImportantImportant
SuperiorSuperior
PreemptivePreemptive
DistinctiveDistinctive
CommunicableCommunicable
AffordableAffordable
ProfitableProfitable
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Figure 8-3:
Possible Value Propositions
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View the ad at right.View the ad at right.
Evaluate the level of Evaluate the level of benefits and the price. benefits and the price.
What value proposition What value proposition is being expressed?is being expressed?
Discussion Question
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Positioning
Choosing a Positioning Strategy:Choosing a Positioning Strategy: Developing a positioning statementDeveloping a positioning statement
Positioning statements summarize the Positioning statements summarize the company or brand positioningcompany or brand positioning
EXAMPLE: To EXAMPLE: To (target segment and (target segment and need)need) our our (brand)(brand) is is (concept)(concept) that that (point-of-difference)(point-of-difference)..
Communicating the chosen positionCommunicating the chosen position
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Positioning
Choosing a Positioning Strategy:Choosing a Positioning Strategy: Communicating and delivering the Communicating and delivering the
chosen positionchosen position Entire marketing mix must support the Entire marketing mix must support the
chosen strategy chosen strategy May require changes to the product, May require changes to the product,
pricing, distribution or promotion. pricing, distribution or promotion.
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Zoots Video Clip
Zoots Drycleaning has adapted its service to meet the needs of its target market and reflect its positioning.
BusinessNow
Click the picture above to play video