MM- Segmentation, Targeting & Positioning252-Lecture5

7/31/2019 MM- Segmentation, Targeting & Positioning252-Lecture5

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Segmentation, Targeting and

Positioning


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Learning Goals

1. Define the three steps of target marketing: marketsegmentation, target marketing, and marketpositioning

2. List and discuss the major bases for segmentingconsumer and business markets

3. Explain how companies identify attractive marketsegments and choose a target marketing strategy

4. Discuss how companies position their products formaximum competitive advantage in themarketplace


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Segmentation, Targeting, and Positioning

Market segmentation: dividing market into distinct

groups with distinct needs, characteristics, or

behaviours, who might require separate products or

marketing mixes Target marketing: choosing which group(s) to appeal

to

Market positioning: creating a clear, distinctive, and

desirable position in the target consumers mind,

relative to competition


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Segmenting Consumer Markets

Geographical segmentation

Demographic segmentation Most popular bases for segmenting consumer markets

Psychographic segmentation Lifestyle, social class, and personality-based segmentation

Behavioural segmentation Occasions, benefits sought, user status, usage rate, loyalty

status.

Using multiple segmentation bases


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Geographic Segmentation Variables

World region

or country

U.S. region

State

City

Neighborhood

City or

metro size

Density

Climate


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Demographic

Segmentation Variables

Age

Gender

Family size

Family life cycle

Income

Occupation

Education

Religion

Race

Generation

Nationality


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Discussion Question

Based on the carexamples on thefollowing slide, how docar manufacturers usethe following segmentswhen marketingproducts?

Geographic

Demographic

Psychographic

behavioural


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Segmenting Business Markets

Geographic segmentation

Demographic segmentation Industry, company size, location

Operating characteristics Technology, usage status, customer capabilities

Purchasing approaches

Situational factors Urgency, specific application, size of order

Personal characteristics Buyer-seller similarity, attitudes toward risk, loyalty


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Segmenting

International Markets

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, behavioural

patterns


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Segmenting

International Markets

Intermarket segmentation

Forming segments of consumers who have similar

needs, even though they live in different countries


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Segmenting Markets Effectively

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


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Learning Goals






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Target Marketing

Target Market

Consists of a set of buyers who share common

needs or characteristics that the company decides

to serve


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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

Undifferentiated (mass) marketing:

Market coverage strategy that ignores market segment differences and targets

the whole market with one offer

Differentiated (segmented) marketing:

Market coverage strategy that targets several market segments and designs

separate offers for each

Concentrated (niche) marketing:

Market coverage strategy in which a company pursues a large share of one or

a few submarkets

Micromarketing:

The practice of tailoring products and marketing programs to the needs/wants

of specific individuals and local customer groups

Includes: local marketing and individual marketing


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Considerations include:

Company resources

The degree of product variability

Products life-cycle stage

Market variability

Competitors marketing strategies

Choosing a

Target Marketing Strategy


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Target Marketing

Socially Responsible Targeting

Some segments, especially children, are at special

risk

Spillover from adult to children markets

Many potential abuses on the Internet, including

fraud Internet shoppers

Products of questionable benefit Controversy occurs when the methods used are

questionable


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Learning Goals






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Positioning

The way the product is defined by consumers onimportant attributes - the place the product occupies

in consumers minds relative to competing products

relative to competing products Involves implanting the brands unique benefits and

differentiation in the customer mind

Perceptual positioning maps show perceptions of

brands on important buying dimensions


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Choosing a Positioning Strategy

Identifying Possible

Competitive Advantages

Choosing the right

competitive advantage Selecting an Overall

Positioning Strategy

Differentiation can be

based on:

Products

Services

Channels

People

Image


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Choosing the right

competitive advantages

Selecting an Overall


How many differences topromote? Unique selling proposition

Several benefits

Which differences topromote? Criteria include: Important

Distinctive

Superior

Communicable

Preemptive Affordable

Profitable


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Choosing the right

competitive advantages Selecting an Overall


Value propositionsrepresent the fullpositioning of the brand

Possible valuepropositions:

More for more

More for the same

More for less

The same for less

Less for much less


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WestJets Value Proposition:

Less for Much Less Founded in 1996 to provide low-fare air travel across western

Canada

Specializes in serving the VFR market (people visiting friendsand relatives).

Main competitor: the family car

People would choose to fly rather than drive if offered lowfares

One type of plane, offers basic in-flight service (no meals, nomovies), single class service, no baggage transfer services withother airlines, etc.

However: less service for less money is defined as feweramenities for a lower fare, not less customer service.

Generates $1 billion in revenues


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A positioning statement summarizes the

company or brand positioning

EXAMPLE: To (target segment and need) our

(brand) is (concept) that (point-of-difference)

Developing a

Positioning Statement


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Communicating and Delivering the

Chosen Position

Companies must take strong steps to deliver

and communicate the desired position to

target consumers

The marketing mix efforts must support the

positioning strategy

Positions must be monitored and adapted

over time to match changes in consumer

needs and competitors strategies


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Learning Goals





MM- Segmentation, Targeting & Positioning252-Lecture5

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