Segmentation, Targeting & Segmentation, Targeting & Positioning: Building the Right Positioning: Building the Right Relationships with The Right Relationships with The Right

CustomersCustomers

Market SegmentationMarket Segmentation

Dividing a market into smaller Dividing a market into smaller groups of buyers distinct needs, groups of buyers distinct needs, characteristics, or behavior who characteristics, or behavior who might require separate products or might require separate products or marketing mixesmarketing mixes

Target Marketing & PositioningTarget Marketing & Positioning

Target MarketingTarget Marketing– The process of evaluating each market The process of evaluating each market

segment’s attractiveness and selecting segment’s attractiveness and selecting one or more segments to enterone or more segments to enter

Market PositioningMarket Positioning– Arranging for a product to occupy a Arranging for a product to occupy a

clear, distinctive, and desirable place clear, distinctive, and desirable place relative to competing products in the relative to competing products in the minds of target customersminds of target customers

Steps in Market STPSteps in Market STP

Market Market SegmentationSegmentation

Identify Bases for Identify Bases for Segmenting the Segmenting the marketmarket

Develop segment Develop segment ProfilesProfiles

Target MarketingTarget Marketing

Develop measure Develop measure of segment of segment attractivenessattractiveness

Select target Select target segmentssegments

Market Market PositioningPositioning

Identify Bases for Identify Bases for Segmenting the Segmenting the marketmarket

Develop segment Develop segment ProfilesProfiles

Major Segmentation Variables for Major Segmentation Variables for Consumer MarketsConsumer Markets

Geographic:Geographic:– World region or countryWorld region or country– Country regionCountry region– City or metro sizeCity or metro size– DensityDensity– ClimateClimate

Major Segmentation Variables for Major Segmentation Variables for Consumer Markets…(cont’d)Consumer Markets…(cont’d)

Demographic:Demographic:– AgeAge– GenderGender– Family sizeFamily size– Family life cycleFamily life cycle– IncomeIncome– OccupationOccupation– EducationEducation– ReligionReligion– RaceRace– GenerationGeneration– NationalityNationality

Major Segmentation Variables for Major Segmentation Variables for Consumer Markets…(cont’d)Consumer Markets…(cont’d)

PsychographicPsychographic– Social classSocial class– LifestyleLifestyle– PersonalityPersonality

BehavioralBehavioral– OccasionsOccasions– BenefitsBenefits– User statusUser status– Loyalty statusLoyalty status– Readiness stageReadiness stage– Attitude towards productsAttitude towards products

Multiple segmentation Basis:

• Combination of variables

•Re-segmenting to narrower sub-segment

Segmenting Business MarketsSegmenting Business Markets

Consumer and business markets use Consumer and business markets use many of same variables to segment many of same variables to segment their markets: G-D-P-Btheir markets: G-D-P-B

Additional variables:Additional variables:– Operating characteristicsOperating characteristics– Purchasing approachesPurchasing approaches– Situational factorsSituational factors– Personal characteristicsPersonal characteristics

Requirements for Effective Requirements for Effective SegmentationSegmentation

Measurable:Measurable:– Size, purchasing power and profilesSize, purchasing power and profiles

Accessible:Accessible:– Can effectively meet and servedCan effectively meet and served

Substantial:Substantial:– Large and profitable enoughLarge and profitable enough

Differentiable:Differentiable:– Response differently to different marketing mixResponse differently to different marketing mix

Actionable:Actionable:– Effective programs can be design for attracting Effective programs can be design for attracting

and serving the segmentsand serving the segments

Target MarketingTarget Marketing

Target market:Target market:– A set of buyers sharing common needs or characteristics A set of buyers sharing common needs or characteristics

that the company decides to servethat the company decides to serve

UndifferentiUndifferentiated (mass) ated (mass) marketingmarketing

DifferentiatDifferentiated ed

(segmented)(segmented) marketingmarketing

ConcentratConcentrated (niche) ed (niche) marketingmarketing

Micro Micro marketing marketing (local or (local or

individual)individual)

Target marketing StrategiesTarget marketing Strategies

Positioning for Competitive Positioning for Competitive AdvantageAdvantage

The company must decide what The company must decide what position it wants to occupyposition it wants to occupy

Marketers wants to develop unique Marketers wants to develop unique market position for their products market position for their products (POP & POD)(POP & POD)– Positioning MapPositioning Map

Developing Positioning StatementDeveloping Positioning Statement

Positioning statement:Positioning statement:– A statement that summarizes company A statement that summarizes company

or brand positioningor brand positioningVolvo: the safest, most durable wagon your family Volvo: the safest, most durable wagon your family can drivecan driveVisa : It’s Everywhere You Want to BeVisa : It’s Everywhere You Want to BeAxe : The axe effectAxe : The axe effect

– Format: To (target segment and need) our Format: To (target segment and need) our (brand) is (concept) that (point of difference)(brand) is (concept) that (point of difference)

– Take strong steps to deliver and communicate Take strong steps to deliver and communicate the the desired positiondesired position to the target market to the target market (marketing mix)(marketing mix)