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UGB229Marketing Management
Lecture 8- Segmentation, Targeting,and Positioning
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Learning Goals1. Learn the three steps of target marketing,
market segmentation, target marketing, andmarket positioning
2. Understand the major bases for segmentingconsumer and business marketing strategy
3. Know how companies identify attractivemarket segments and choose targetmarketing strategy
4. Realize how companies position theirproducts for maximum competitiveadvantage in the marketplace
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Sells multiple brandswithin the same product category for a variety of productsBrands feature adifferent mix of benefits
and appeal to different segments
Has also identifieddifferent niches withincertain segmentsProduct modificationsare useful: Tide offersseven different product formulations to servedifferent niches needs
C ase StudyProcter & GambleProcter & Gamble
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Steps in market segmentation,
targeting and positioningMarket Segmentation
I dentify bases for segmenting the market
Develop segment profilesTarget MarketingDevelop measure of segmentattractivenessSelect target segments
Market PositioningDevelop positioning for target segmentsDevelop a marketing mix for each segment
Goal 1: Learn the three steps of target marketing
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DefinitionMarket Segmentation:
Dividing a market into distinctgroups with distinct needs,characteristics, or behavior whomight require separate products ormarketing mixes.
G oal 2: Understand the major bases for segmentation
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Segmenting C onsumer
MarketsGeographical segmentationDemographic segmentation
Most popular segmentationPsychographic segmentation
Lifestyle, social class, and
personality-based segmentationBehavioral segmentation
G oal 2: Understand the major bases for segmentation
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Geographic segmentation divides the
market into different geographicalunits such as nations, regions,states, counties, or cities
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W orld regionor country
U.S. regionStateC ity
NeighborhoodC ity ormetro sizeDensityC limate
Geographic Segmentation
Variables
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Demographic segmentation divides the
market into groups based on variablessuch as age, gender, family size, family lifecycle, income, occupation, education,religion, race, generation, and nationality
Demographic segmentation is the mostpopular segmentation method becauseconsumer needs, wants, and usage oftenvary closely with demographic variables and
are easier to measure than other typesof variables
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Demographic Segmentation
Variables AgeGenderFamily sizeFamily life cycleI ncome
OccupationEducationReligionRaceGeneration
Nationality
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Psychographic segmentationdivides buyers into differentgroups based on social class,lifestyle, or personality traits
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Behavioral segmentation dividesbuyers into groups based on theirknowledge, attitudes, uses, orresponses to a product:-
OccasionBenefits soughtUser statusUsage rateLoyalty status
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OccasionsBenefitsUser Status
Attitude Towardthe Product
User RatesLoyalty StatusReadiness Stage
BehavioralBehavioral Segmentation
Variables Variables
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Segmenting Business
MarketsDemographic segmentation
I ndustry, company size, locationOperating variables
Technology, usage status, customer capabilitiesPurchasing approachesSituational factors
Urgency, specific application, size of orderPersonal characteristics
Buyer-seller similarity, attitudes toward risk, loyalty
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Segmenting I nternational
MarketsGeographic segmentation
Location or regionEconomic factors
Population income or level of economicdevelopment
Political and legal factorsType / stability of government, monetaryregulations, amount of bureaucracy, etc.
C ultural factorsLanguage, religion, values, attitudes, customs,behavioral patterns
G oal 2: Understand the major bases for segmentation
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Requirements for Effective
SegmentationMeasurable
Size, purchasing power, and profile of segment Accessible
C an be reached and servedSubstantial
Large and profitable enough to serveDifferentiable
Respond differently
ActionableEffective programs can be developed
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C riteria forsuccessful segmentation
Clear differences
in consumer preferences for aproduct must
exist.
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C riteria forsuccessful segmentation
D ifferencepreferences for aproduct must beidentifiable andcapable of being
related tomeasurablevariables.
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Th e proposed
market segmentmust h ave enoug h size and
purch
asing power to be profitable.
C riteria for
successful segmentation
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Companies mustbe able to respondto differencepreferences wit h an appropriate
marketing mix.
C riteria for
successful segmentation
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Th e proposedmarket segmentmust be readilyaccessible andreac h able wit h
market programs.
C riteria for
successful segmentation
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Target Marketing
Target MarketC onsists of a set of buyers who sharecommon needs or characteristicsthat the company decides to serve
G oal 3: Know how companies identify and target attractive segments
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Target Marketing
Evaluating Market SegmentsSegment size and growthSegment structural attractiveness
Level of competitionSubstitute productsPower of buyers
Powerful suppliersC ompany objectives and resources
G oal 3: Know how companies identify and target attractive segments
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Target MarketingSelecting Target Market Segments
Undifferentiated (mass) marketing
Differentiated (segmented)marketingC oncentrated (niche) marketingMicromarketing (local or individual)
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Target Marketing
Socially Responsible TargetingSome segments, especially children,are at special riskMany potential abuses on theI nternet, including fraud I nternetshoppersC ontroversy occurs when themethods used are questionable
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Positioning
Positioning:The place the product occupies inconsumers minds relative to competingproducts.Typically defined by consumers on thebasis of important attributes.I nvolves implanting the brand s uniquebenefits and differentiation in thecustomer s mind.Positioning maps that plot perceptions ofbrands are commonly used.
G oal 4: Realize how companies position their products
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Example of Positioning Map C arBrands in USA
Price (Y-axis) andorientation(X-axis)
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I dentifying possiblecompetitive advantagesC hoosing the rightcompetitive advantageC hoosing a positioning
strategy
Differentiation can be basedon
Products
ServicesC hannelsPeopleI mage
TopicsTopics
C hoosing a Positioning
Strategy
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Market SegmentationHow many differences topromote?
Unique sellingpropositionSeveral benefits
W hich differences topromote? C riteria include:
I mportantDistinctiveSuperiorC ommunicablePreemptive
AffordableProfitable
TopicsTopicsI dentifying possiblecompetitive advantagesC hoosing the rightcompetitive advantageC hoosing a positioning
strategy
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Market Segmentation
Value propositionsrepresent the fullpositioning of the brandPossible value propositions:
More for MoreMore for the SameMore for LessThe Same for LessLess for Much Less
TopicsTopicsI dentifying possiblecompetitive advantagesC hoosing the rightcompetitive advantageC hoosing a positioning
strategy
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Developing a
Positioning StatementPositioning statements summarizethe company or brand positioning
EXAMPLE: To (target segment andneed) our (brand) is (concept) that(point-of-difference)
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C ommunicating the
PositioningC ompanies must be certain toDELI VER their value propositions.Positions must be monitored andadapted over time.
G oal 4: Realize how companies position their products