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Segmentation, Targeting and Positioning:
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Building the Right Relationships with the Right Customers
•Chapter 9
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•Express version
•Instructor name
•Course name
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•Date
Principles of Marketing, Sixth Canadian Edition
Learning Objectives
9.2
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• After studying this chapter, you should be able to:
– Define the three steps of target marketing: market
segmentation, target marketing, and market positioning
– List and discuss the bases for segmenting consumer and
business markets
– Explain how companies identify
attractive market segments and
choose a market coverage strategy
– Discuss how companies position
their products for maximum
competitive advantage in the
marketplace
Principles of Marketing, Sixth Canadian Edition
Steps in Market Segmentation,
Targeting, and Positioning
9.3
• Market segmentation: dividing market into distinct groups
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which will require separate marketing mixes
• Target marketing: choosing which group(s) to appeal to
• Market positioning: creating a clear, distinctive position in the
consumer’s mind relative to competition
Figure 9.1
Principles of Marketing, Sixth Canadian Edition
Consumer Market Segmentation (Table 9.1)
Copyright © 2005 Pearson Education Inc.
• Geographic:
– Regions
– Size/density
– Climate
• Demographic:
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Age/generation
Gender
Family size/life-cycle
Income
Occupation
Religion
Ethnic origin
9.4
• Psychographic:
– Social class
– Lifestyle
– Personality
• Behavioral:
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–
–
–
–
–
Occasions
Benefits
User status
Usage rate
Loyalty status
Readiness state
Attitude toward product
Principles of Marketing, Sixth Canadian Edition
Business Markets Segmentation (Table 9.2)
Copyright © 2005 Pearson Education Inc.
• Demographic:
• Purchasing approaches:
– Industry
– Company size
– Location
• Operating variables:
– Technology
– User/non-user status
– Customer capabilities
• Situational factors:
– Urgency
– Specific application
– Size of order
9.5
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Purchasing organization
Power structure
Existing relationships
General policies
Purchasing criteria
• Personal characteristics:
– Buyer-seller similarity
– Attitude towards risk
– Loyalty
Principles of Marketing, Sixth Canadian Edition
Segmenting International Markets
9.6
Copyright © 2005 Pearson Education Inc.
• International markets can be segmented by:
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–
–
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Geographic location
Economic factors
Political and legal factors
Cultural factors
• Intermarket segmentation:
– Forming segments of consumers
who have similar needs, even
though they live in different
countries
Principles of Marketing, Sixth Canadian Edition
Requirements for Effective Segmentation
9.7
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• To be useful, market segments must be:
– Measurable:
• Size, purchasing power, and profiles can be measured
– Accessible:
• Segments can be reached
– Substantial:
• Large enough to be profitable
– Actionable:
• Programs can be developed to
attract and serve the segments
Principles of Marketing, Sixth Canadian Edition
9.8
Copyright © 2005 Pearson Education Inc.
Target Marketing Strategies
• Three factors used to evaluate segments:
– Segment size and growth
– Structural attractiveness
• Competition, substitute products, power of buyers/suppliers
– Company objectives and resources
Figure 9.2
Principles of Marketing, Sixth Canadian Edition
Copyright © 2005 Pearson Education Inc.
Choosing a Target Marketing Strategy
9.9
• Factors to be considered:
– Company resources
– Product variability
– Product’s life-cycle stage
– Market variability
– Competitor’s marketing
strategies
Principles of Marketing, Sixth Canadian Edition
Positioning for Competitive Advantage
9.10
• Product position: the way the product is defined by consumers
Copyright © 2005 Pearson Education Inc.
on important attributes, relative to competing products
• Competitive advantage: an advantage gained over
competitors by offering (and delivering) greater value
• Sources of differentiation:
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Product
Service
Marketing channels
People
Image
Principles of Marketing, Sixth Canadian Edition
Which Differences to Promote?
9.11
• Unique selling proposition (USP): aggressively promoting
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one benefit to the target audience
• Three major positioning
errors:
– Under-positioning
– Over-positioning
– Confused positioning
• Differences should be:
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Important
Distinctive
Superior
Communicable
Pre-emptive
Affordable
Profitable
Principles of Marketing, Sixth Canadian Edition
Possible Value Propositions
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• Value proposition:
9.12
Figure 9.3
– Full positioning of a
brand
– Mix of benefits used
for positioning
Principles of Marketing, Sixth Canadian Edition
In Conclusion…
9.13
Copyright © 2005 Pearson Education Inc.
• The learning objectives for this chapter were:
– Define the three steps of target marketing: market
segmentation, target marketing, and market positioning
– List and discuss the bases for segmenting consumer and
business markets
– Explain how companies identify
attractive market segments and
choose a market coverage strategy
– Discuss how companies position
their products for maximum
competitive advantage in the
marketplace
Principles of Marketing, Sixth Canadian Edition