Chapter Six Segmentation, Targeting, and Positioning:

Chapter Six

Segmentation, Targeting, and Positioning:

Copyright 2007, Prentice Hall, Inc. 2

So Far, we have learned…

What is marketing? Customers’ needs and wants Customer relationship Marketing management philosophies The five-steps of marketing process Marketing environment factors Marketing research process Consumer behavior Now, we are ready to do marketing


Segmentation

Target

Product

Price Promotion

Distribution


Steps in Target Marketing

Market segmentation Dividing a market into smaller groups of buyers with distinct

needs, characteristics, or behaviors requiring separate products or marketing mixes.

Target marketing Evaluating each segment’s attractiveness and selecting

one or more to enter. Market positioning

Setting the competitive positioning for the product and creating a detailed marketing mix.


Market Segmentation

Key variables: Geographic Demographic Psychographic Behavioral

No single way to segment a market. May combine more than one variable to

better define segments.


Market Segmentation

Geographic: World region or country Region of country City or metro size Density or climate


Market Segmentation

Demographic: Age, gender, family size, family life cycle, income,

occupation, education, race, religion, etc. The most popular bases for segmenting customer

groups. Easier to measure than most other types of

variables.


Market Segmentation

Age and Life-Cycle Stage: Example: P&G has different toothpastes for

different age groups. Avoid stereotypes in promotions. Promote positive messages.


Market Segmentation

Income: Identifies and targets the affluent for luxury goods. People with low annual incomes can be a

lucrative market. Some manufacturers have different grades of

products for different markets.


Market Segmentation

Psychographic: Social class (lower class, working class, middle

class, & upper class) or (values, interests, and behaviors)

Lifestyle (adventurous, fishing, hunting) Personality (sophisticated, confidence,

competence/intelligent, imaginative)


Market Segmentation

Behavioral: Occasion segmentation: buyers can be grouped

according to occasions Special promotions and labels for holidays.

(e.g., Hershey Kisses)

Special products for special occasions. (e.g., Kodak disposable cameras)


Market Segmentation

Behavioral: Benefits Sought: group buyers according to the

different benefits Different segments desire different benefits from

products. P&G’s multiple brands of laundry detergents to satisfy different

needs in the product category Nokia provides different features to satisfy different needs


Market Segmentation

Behavioral: User Status

Nonusers, ex-users, potential users, first-time users, regular users

Usage Rate Light, medium, heavy

Loyalty Status Brands, stores, companies


Market Segmentation

Best to use multiple approaches in order to identify smaller, better-defined target groups. Start with a single base and then expand to other

bases.


Criteria for Targeting

Segment Size and Growth Analyze current segment sales, growth rates, and

expected profitability. Segment Structural Attractiveness

Consider competition, existence of substitute products, and the power of buyers and suppliers.

Company Objectives and Resources Examine company skills & resources needed to succeed

in that segment. Offer superior value and gain advantages over

competitors.


Target Marketing Strategies

Undifferentiated (mass) marketing Ignores segmentation opportunities

Differentiated (segmented) marketing Targets several segments and designs separate

offers for each Concentrated (niche) marketing

Targets one or a couple small segments Micromarketing (local or individual marketing)


Micromarketing

Tailoring products and marketing programs to suit the tastes of specific individuals and locations. Local Marketing: Tailoring brands and promotions

to the needs and wants of local customer groups—cities, neighborhoods, specific stores.

Individual Marketing: Tailoring products and marketing programs to the needs and preferences of individual customers.


Positioning for Competitive Advantage Product’s position is the way the product is

defined by consumers on important attributes, or as the place the product occupies in consumers’ minds relative to competing products. Perceptual position maps can help define a

brand’s position relative to competitors.


Choosing a Positioning Strategy

Identify a set of possible competitive advantages on which to build a position. Competitive advantage – extent to which a

company can position itself as providing superior value, achieved via differentiation.

Choose the right competitive advantages. Select an overall positioning strategy.


Identifying Possible Competitive Advantages Product differentiation (features, style, or

design) Services differentiation (speedy, convenient,

or delivery) Image differentiation (quality, logo, or color) People differentiation (trained people,

friendly)


Positioning Errors

Underpositioning: Failing to really position the company at all.

Overpositioning: Giving buyers too narrow a picture of the

company. Confused Positioning:

Leaving buyers with a confused image of a company.


Tips: Communicating and Delivering the Chosen Position

Company must take strong steps to deliver and communicate the desired position to target consumers.

The marketing mix efforts must support the positioning strategy.

Must monitor and adapt the position over time to match changes in consumer needs and competitors’ strategies.

Documents

Chapter Six Segmentation, Targeting, and Positioning: