Chapter 8
Market Segmentation,
Targeting and Positioning
1
Benefits of Segmentation
• Effective use of resources
• Gain a focus
• Create Value for a target market
• Positioning
2
Steps in Market Segmentation,
Targeting, and Positioning
Market Segmentation
1. Identify bases for
segmenting the market
2. Develop segment profiles
Market Targeting
3. Develop measure of
segment attractiveness
4. Select target segments
Market Positioning
5. Develop positioning for
target segments
6. Develop a marketing
mix for each segment
3
Step 1. Market Segmentation
Levels of Market Segmentation
Through Market Segmentation, Companies Divide Large, Heterogeneous
Markets into Smaller Segments that Can be Reached More Efficiently And
Effectively With Products and Services That Match Their Unique Needs.
Mass Marketing
Same product to all consumers
(no segmentation, i. e. a commodity)
Segment Marketing
Different products to one or more segments
(some segmentation, i.e. Marriott)
4
Step 1. Market Segmentation
Geographic Segmentation
International
Accor
National
Regional/City
5
Step 1. Market Segmentation
Demographic Segmentation
• Dividing the market into groups based
on variables such as:
– Age
– Gender
– Family size or life cycle
– Income
– Occupation
– Education
– Religion
– Race
– Generation
– Nationality
6
Step 1. Market Segmentation
Psychographic Segmentation
Divides Buyers Into Different Groups Based on:
7
Step 1. Market Segmentation
Behavioral Segmentation
• Dividing the market into groups
based on variables such as:
– Occasions
– Benefits
– User status
– Usage rate
– Loyalty status
– Readiness stage
– Attitude toward product
8
Step
Step 1.
1. Market
Market Segmentation
Segmentation
Segments
Segmentsmust
must respond
responddifferently
differentlyto
to different
different marketing
marketingmix
mix
elements
elements&&programs
programs
Requirements
R equirements for
for effective
effective segmentation
segmentation
• Size, purchasing power, profiles
Measurable
Measurable of segments can be measured.
• Segments can be effectively
Accessible
Accessible reached and served.
• Segments are large or profitable
Substantial
Substantial enough to serve.
• Effective programs can be
designed to attract and serve
Actionable
Actionable the segments.
9
Evaluating Market Segments
• Segment size and growth
• Segment structural attractiveness
• Company objectives and resources
10
Step 2. Market Targeting
Market Coverage Strategies
A. Undifferentiated Marketing
Company
Company
Marketing
Marketing Market
Market
Mix
Mix
B. Differentiated Marketing
Company
Company
Marketing Segment
Segment11
MarketingMix
Mix11
Company
Company Segment
Segment22
Marketing
MarketingMix
Mix22
Company
Company Segment
Segment33
Marketing
MarketingMix
Mix33
C. Concentrated Marketing
Company Segment
Segment11
Company
Marketing
Marketing Segment
Segment22
Mix
Mix Segment
Segment33
11
Choosing a market-coverage
strategy
• Company resources
• Degree of product homogeneity
• Market homogeneity
• Competitors’ strategies
12
Step 3: Positioning for Competitive
Advantage
• Product’s Position - the way the product is
defined by consumers on important attributes -
the place the product occupies in consumers’
minds relative to competing products.
Marketers must:
– Plan positions to give their products the
greatest advantage in selected target
markets
13
Positioning Strategies
• Positioning by specific product attributes
• Positioning by benefits
• Positioning for user category
• Positioning for usage occasion
• Positioning against another competitors
• Positioning against another product class
14
Steps to Choosing and Implementing
a Positioning Strategy
• Step 1. Identifying Possible Competitive
Advantages: Competitive Differentiation.
• Step 2. Selecting the Right Competitive
Advantage: Unique Selling Proposition
(USP).
• Step 3. Communicating and Delivering
the Chosen Position.
15
Product Differentiation
• Physical attributes
• Service differentiation
• Personnel differentiation
• Location
• Image differentiation
16
Which differences to promote?
• Important to customers
• Distinctive
• Superior
• Communicable to customers
• Preemptive
• Affordable
• Profitable
17
Perceptual Map
Positioning
map of
service level
versus
price. Source:
Lovelock,
Services
Marketing,
Prentice Hall
18
Perceptual Map
Live shows 1.0
Easy to reach Little waiting
0.8
Good food
Fantasy 0.6
Educational,
animals
Exercise Marineland
0.4
Fun rides Knott’s of the
Berry 0.2
Japanese Pacific
Disneyland Farm Deer Park
-1.6 -1.4 -1.2 -1.0 -0.8 -0.6 -0.4 -0.2 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6
-0.2
Magic Lion
Mountain -0.4 Country
Busch Safari
-0.6 Gardens
-0.8 Economical
19
THANK YOU
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