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Market segmentation and positioning
Angelika Brix
Bartosz Konior
Stephan Richter
November 2006
2(c) Brix, Konior, Richter
Overview:
Market segmentation
Consumer Markets
Organizational Markets
Evaluation of segments
Target Market
Positioning and Repositioning
¹ soucre: Jobber, p.210 3(c) Brix, Konior, Richter
What is Market segmentation?
„...the identification of individuals or organizations with similar characteristics that have significant implications for the determination of marketing strategies.“¹
² source: Wikipedia 4(c) Brix, Konior, Richter
What is Market segmentation?
„Market segmentation is the process in marketing of dividing a market into distinct subsets (segments) that behave in the same way or have similar needs.
...to respond with appropriate marketing strategies that satisfy the different preferences of each chosen segment.“²
Source: Jobber, D. "Principles and practice of marketing" 5(c) Brix, Konior, Richter
Benefits from market segmentation
Market segmentation
Target market selection
Opportunities and threats
DifferentiationTailored
marketing mix
6(c) Brix, Konior, Richter
Benefits from market segmentation
Target market selection
Chosen segment of market
Similar characteristics of customer
Single marketing mix strategy
Tailored marketing mix
Grouping of customers
Tailoring marketing mix package
Implementation of the marketing concept
7(c) Brix, Konior, Richter
Benefits from market segmentation
Differentiation
Dividing into sub-segments
Target more than one segment
Differentiate its offering
Opportunities and threats
Rarely static markets => new segments emerge
Chance of being the first
Threat of faster competitors
Source: Jobber, D. "Principles and practice of marketing" 8(c) Brix, Konior, Richter
The process of market segmentation and target marketing
The disaggregated market
The characteristics of individual customers are understood
c1
c4
c7
c2
c5
c3
c6
c8
The segmented market
Customers are grouped into segments on the basis of having similar characteristics
1 2 3
c4
c3
c8
c5
c7 c6
c2
c1
The target market
Segment 3 is judged to be most attractive and a marketing mix strategy is designed for that target market
Marketingmix targeted at segment 3
c5
c7 c6
c2
c1
c4
c3
c8
9(c) Brix, Konior, Richter
The process of market segmentation and target marketing - example
The disaggregated market
10(c) Brix, Konior, Richter
The process of market segmentation and target marketing - example
The segmented market according to type of buyer
Sport & imageConvenience &
securityAdventure
11(c) Brix, Konior, Richter
The process of market segmentation and target marketing - example
The target market
Sport & image
This segment is judged to be most attractive
Convenience & security Adventure
12(c) Brix, Konior, Richter
Segmenting markets
Market segmentation
Consumer segmentation
Organizational segmentation
13(c) Brix, Konior, Richter
Segmenting consumer markets
Consumer segmentation
Behavioural
Psychographic
Profile
Benefits sought
Purchase occasion
Purchase behaviour
Usage
Perception and beliefs
Source: www.nokia.com; www.vertu.com 14(c) Brix, Konior, Richter
Segmenting consumer markets
Functionality
Benefits soughtPleasure
1.3 megapixel camera
High quality video streaming with sound
Active TFT display
Bluetooth, USB
XHTML browsing and email over TCP/IP
MP3 player and FM radio
...
Simple
Lack of sophisticated features
Convenient
Image
Display with Sapphire Crystal screen
Stainless steel keys with jewelled bearings
High price
15(c) Brix, Konior, Richter
Segmenting consumer markets
Consumer segmentation
Behavioural
Psychographic
Profile
Lifestyle
Personality
16(c) Brix, Konior, Richter
Segmenting consumer markets
Consumer segmentation
Behavioural
Psychographic
Profile
Demographic
Socio-economic
Geographic
17(c) Brix, Konior, Richter
Segmenting organizational markets
Macrosegmentation
Organisational segmentation
Microsegmentation
Organizational size
Industry
Geographic location
18(c) Brix, Konior, Richter
Segmenting organizational markets
Macrosegmentation
Organisational segmentation
Microsegmentation
Choice Criteria
Decision-making unit structure
Decision-making Process
Buy class
Purchasing organization
Organizational innovativeness
19(c) Brix, Konior, Richter
Evaluating market segments
Market factors
Competitive factors
Political, social and environmental factors
Market attractiveness
segment size
segment growth rate
segment profitability
price sensitive
bargaining power of customers
bargaining power of suppliers
barriers to market segment entry
barriers to market segment exit
nature of competition
new entrants
competitive differentiation
political issues
social trends
environmental issues
Source: Jobber, D. "Principles and practice of marketing" 20(c) Brix, Konior, Richter
Company’s capability to compete
Capability to compete
Exploitable marketing assets
Technological edge
Managerial capability and commitment
Cost advantages
Source: Jobber, D. "Principles and practice of marketing" 21(c) Brix, Konior, Richter
Target marketing strategies
Segment 1
Segment 2
Segment 3
Differentiated marketing
Marketing mix 1
Marketing mix 2
Marketing mix 3
Customer 2
Customer 1
Customer 3
Customized marketing
Marketing mix 1
Marketing mix 2
Marketing mix 3
Undifferentiated marketing
Whole marketMarketing mix
Marketing mix
Focused marketing
22(c) Brix, Konior, Richter
Positioning
Key issues of positioning
Market segmentation
Target market Where we want to compete?
Differential advantage How we wish to compete?
Source: Jobber, D. "Principles and practice of marketing" 23(c) Brix, Konior, Richter
Successful positioning
Successful positioning
Clarity
Competitiveness
Credibility Consistency
Source: Jobber, D. "Principles and practice of marketing" 24(c) Brix, Konior, Richter
Perceptual mapping
Identify a set of competing brands
Identify important attributes
Conduct quantitative marketing research
Plot brands on a two-dimensional maps
High price
Low price
Wide product range
Narrow product range
A
B
CD
X
G
F
E
Source: Jobber, D. "Principles and practice of marketing" 25(c) Brix, Konior, Richter
Repositioning strategies
Image repositioning
Tangible repositioning
Product repositioning
Intangible repositioning
Product
Target market
Same Different
Same
Different
26(c) Brix, Konior, Richter
References:
1 David Jobber, Principles and Practice of Marketing, 4th Edition, page 210
2 Wikipedia, http://en.wikipedia.org/wiki/Market_segmentation
3 Nokia, http://www.nokia.co.uk/nokia/0,,71691,00.html
4 Vertu, http://www.vertu.com/
27(c) Brix, Konior, Richter
Market segmentation and positioning
Thank you for your attention!
Angelika Brix
Bartosz Konior
Stephan Richter
