Download Chapter 7 – Segmentation, targeting and positioning

Chapter 7 – Segmentation, targeting and positioning
Segmentation
Dividing a market into distinct groups with distinct needs, characteristics or behaviour who
might require separate products or marketing mixes.
Segments should have:
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Maximal within group similarity
 Maximal difference between other groups
Segments should be well defined and actionable.
Positioning
Setting product attributes price and the promotional mix to meet target standards.
Positioning is about perceptions – how target markets perceive your product offering
The type of channels you use will dramatically affect how people view our product
Positioning questions
- What effect will selling a product through dollar stores vs. high end department
stores have on consumer perception?
- What about selling high-end watches only on the internet vs. only though high-end
watch stores?
- What about selling office supplies and equipment through professional salespeople
vs. staples?
Requirements 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
Segmenting consumer markets
Geographical segmentation
- Nation or country
- State or region
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City or metro size
Density
Climate
Demographic segmentation
- Age,
- Race (Hispanic, Asian, Africans, LGBT)
- gender
- Income, education
- Family size
- Family life circle
- Occupation
- Religion, nationality
- Generation (baby boom for example)
- Social class
Psychographic segmentation
- Lifestyle (how people live, how they spend their time and money, how they allocate
their time)
 Activities
 Interests
 Opinions
à VALS life-style classification
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Personality (refers to internal characteristics)
Core values
Behavioural segmentation
- Occasions (valentine’s day)
- Benefits
- User status
- Usage rate
- Loyalty status
- Buyer-readiness
o Decision roles
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Initiator
Influencer
Decider
Buyer
User
Benefit Segmentation
- Segmentation on the basis of the most important benefit sought by consumers
when purchasing the product or service
Segmenting International markets
Inter-market segmentation involves forming segments of consumers who have similar
needs and buying behaviours even though they are located in different countries
Evaluating market segments
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Segment size and growth
Segment structural attractiveness
Company objectives and resources
Selecting target market segments
Undifferentiated marketing targets the whole market with one offer.
mass marketing
focuses on common needs rather than what’s different
Differentiated marketing targets several different market MISSING NOTES
Niche marketing targets a larger share of a smaller marketing
 Limited company resources
 Knowledge of the market
 More effective and efficient
Micromarketing is the practice of tailoring products and marketing programs to suit the
tastes of specific individuals and locations.
- Local marketing
- Individual marketing à AKA one – to one marketing / mass customization
Choosing a targeting strategy depends on
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Company resources
Product variability
Product life-cycle stages
Market variability
Competitors’ marketing strategies
Typical positioning strategies
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Socially responsible firm
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Green products
Low price- premium price (Value pricing)
Luxury products
Quality levels
Cool products
High tech
Reliability
Customer service
And many more
Differentiation and positioning
Competitive advantage is an advantage over competitors gained by offering consumers
greater value either through lower prices or by providing more features / greater quality
Identifying a set of possible competitive advantages to differentiate along the lines of:
- product
- services
- channels
- people
- image
Positioning maps show consumer perceptions of marketer’s brands vs. competing products
on important buying dimensions.
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