Market Segmentation, Targeting, and Positioning for Competitive Advantage

Market Segmentation, Targeting, and Positioning for Competitive Advantage

Group 3

Market segmentationThe process of dividing a market into meaningful, relatively similar, and identifiable segments or groups.

Levels of Market segmentation

No segmentationComplete segmentation

Mass marketingThe marketer or seller targets the mass market or the entire consumer base

Segment marketingThe marketer or seller divides the market into different segments depending on the consumers buying behaviour, requirements, purchasing power, location and age level.

Niche marketingThe seller caters to a very specific segment which needs more attention and high quality products

Lower competition resulting to higher prices

MicromarketingLocal marketing marketer only concentrate on the local market. Products have appeal to local usageIndividual marketing almost the same as direct marketing where market target individual customers separately

Bases for Segmenting Consumer Market

Geographic segmentationIkea discovered that its Japanese customers live in small spaces. In response, its store displays suggest ways for customers to fit IKEA products into the cramped spaces of typical Japanese homes

Demographic SegmentationAge segmentation(newborns, infants, young children, tweens, teens, Generation X, Generation Y, Baby boomers, Golden Generation or Depression Generation)

Tweens (9-12) desire to be kids but also want the fun of being teenagerBaby boomers refuse to believe that theyre aging, so marketers should avoid suggesting it

Demographic segmentationGender SegmentationIn the new car market, women are increasingly making buying decision, and car makers are starting to cater for them. Ford offers eye shadow and nail polish complementing the color of its cars

Demographic SegmentationIncome SegmentationLexus has travelled the US asking wealthy customers what they want, and is developing several new cars costing over $70,000 to appeal to this group

Demographic SegmentationEthnic SegmentationKraft foods and Procter & Gamble are showing interest in Asian Americans due to the growth of Asian supermarket chains

Demographic SegmentationFamily Life Cycle SegmentationA series of stages determined by a combination of age, marital status, and the presence or absence of children

Psychographic SegmentationPersonality: reflects a persons traits, attitudes and habitsMotivesLifestyleGeodemographics

Benefit SegmentationIs the process of grouping customers into market segments accdg. To the benefits they seek from the productPowerBar is designed for athletes and consumers looking for long-lasting fuel.

Usage-Rate SegmentationDivides a market by the amount of product bought or consumedThe 80/20 principle holds that 20 percent of all customers generate 80 percent of the demand

Bases for Segmenting Business Market

Bases for Segmenting International market

Requirement for Effective SegmentationMeasurable - Size, purchasing power and profile of segmentAccessible - Can be reached and servedSubstantial - Large and profitable enough to serveDifferentiable respond differentlyActionable effective programs can be developed

Determining attractive market segment

Level of competitionSubstitute productsPower of buyer Power of supplier

Market targetingChoosing one market segment for the intention of meeting the needs of that group.Strategies:Undifferentiated mass marketingDifferentiated segment marketingConcentrated niche marketing

Market positioningDeveloping a specific marketing mix to influence potential customers overall perception of a brand , product line, or organization in general.

Position mapping

creating a visual description about consumerperceptions of a product on two ormore dimensions in relation to competitors.

Check-list for determining a positioning strategyi. What position do we own? ~in the mind of the prospect.ii. What position do we want to own?iii. Whom must we outgun?iv. Do we have enough money?v. Can we stick it out? Consistency is essentialvi. Does our advertising match our position?