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Segmentation, Targeting,

and Positioning

Building the Right Relationshipswith the Right Customers

Chapter 7

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Steps in market segmentation,

targeting and positioningMarket Segmentation

Identify bases for segmenting the market Develop segment profiles

Target Marketing Develop measure of segment

attractiveness Select target segments

Market Positioning Develop positioning for target segments Develop a marketing mix for each segment

Goal 1: Learn the three steps of target marketing

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DefinitionMarket Segmentation:

Dividing a market into distinct

groups with distinct needs,characteristics, or behavior whomight require separate products ormarketing mixes.

Goal 2: Understand the major bases for segmentation

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Segmenting Consumer

MarketsGeographical segmentation

Demographic segmentation Most popular segmentation

Psychographic segmentation Lifestyle, social class, and

personality-based segmentationBehavioral segmentation

Goal 2: Understand the major bases for segmentation

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World regionor country

U.S. region State

City

Neighborhood

City or

metro size Density

Climate

Geographic SegmentationVariables

Goal 2: Understand the major bases for segmentation

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Demographic SegmentationVariables

Age

Gender

Family size Family life cycle

Income

Occupation

Education

Religion Race

Generation

Nationality

Goal 2: Understand the major bases for segmentation

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Occasions

Benefits

User Status Attitude Toward

the Product

User Rates

Loyalty Status

Readiness Stage

Behavioral SegmentationVariables

Goal 2: Understand the major bases for segmentation

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Requirements for EffectiveSegmentation

Measurable Size, purchasing power, and profile of segment

Accessible

Can be reached and servedSubstantial

Large and profitable enough to serve

Differentiable Respond differently

Actionable Effective programs can be developed

Goal 2: Understand the major bases for segmentation

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Target Marketing

Target Market Consists of a set of buyers who share

common needs or characteristicsthat the company decides to serve

Goal 3: Know how companies identify and target attractive segments

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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

Goal 3: Know how companies identify and target attractive segments

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Choosing a Target

Marketing StrategyConsiderations include:

Company resources

The degree of product variability Products life-cycle stage

Market variability

Competitors marketing strategies

Goal 3: Know how companies identify and target attractive segments

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Target Marketing

Socially Responsible Targeting Some segments, especially children,

are at special risk Many potential abuses on the

Internet, including fraud Internetshoppers

Controversy occurs when themethods used are questionable

Goal 3: Know how companies identify and target attractive segments

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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. Involves implanting the brands unique

benefits and differentiation in thecustomers mind.

Positioning maps that plot perceptions ofbrands are commonly used.

Goal 4: Realize how companies position their products

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Identifying possible

competitive advantagesChoosing the rightcompetitive advantage

Choosing a positioning

strategy

Differentiation can be basedon

Products Services Channels People Image

TopicsChoosing a Positioning

Strategy

Goal 4: Realize how companies position their products

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Market Segmentation

How many differences topromote?

Unique sellingproposition

Several benefits

Which differences topromote? Criteria include:

Important

Distinctive

Superior

Communicable

Preemptive

Affordable

Profitable

TopicsIdentifying possible

competitive advantagesChoosing the rightcompetitive advantage

Choosing a positioning

strategy

Goal 4: Realize how companies position their products

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Market Segmentation

Value propositionsrepresent the fullpositioning of the brand

Possible value propositions: More for More

More for the Same

More for Less

The Same for Less

Less for Much Less

TopicsIdentifying possible

competitive advantagesChoosing the rightcompetitive advantage

Choosing a positioning

strategy

Goal 4: Realize how companies position their products

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Developing a

Positioning StatementPositioning statements summarizethe company or brand positioning

EXAMPLE: To (target segment andneed) our (brand) is (concept) that(point-of-difference)

Goal 4: Realize how companies position their products

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Communicating the

PositioningCompanies must be certain toDELIVER their value propositions.

Positions must be monitored andadapted over time.

Goal 4: Realize how companies position their products