Week 2

Segmentation, Targeting, Hospitality Marketing

and Positioning Nur Agustinus
 Objectives
• Be able to define the three steps of target
marketing: market segmentation, target
marketing, and market positioning.
• Understand the major bases for segmenting
consumer and business markets.
 Introduction
• Market - Group of people with sufficient
purchasing power, authority, and willingness
to buy
• Target market - Group of people a firm
believes is most likely to buy its goods and
services

3
 Types of Markets
• Consumer products - Products bought by
ultimate consumers for personal use
• Business products - Goods and services
purchased for use either directly or indirectly
in the production of other goods and services
for resale

5
The STP Process

• Segmentation is the process of classifying customers into

groups which share some common characteristic
• Targeting involves the process of evaluating each segments
attractiveness and selecting one or more segments to enter
• Positioning is arranging for a product to occupy a clear,
distinctive and desirable place relative to competing products in
the mind of the consumer
 Definition
• Market Segmentation:
– Dividing a market into distinct groups
with distinct needs, characteristics,
or behavior who
might require
separate products
or marketing
mixes.
 Segmentation Process
• Marketers follow two methods to determine the
bases on which to identify markets:
– Segments are predefined by managers based
on their observation of the behavioral and
demographic characteristics of likely users
– Segments are defined by asking customers
which attributes are important and then
clustering the responses
 Step 1. Market
Geographic Segmentation
Nations, states,
regions or cities Bases for Segmenting
Consumer Markets
Demographic
Age, gender, family size
and life cycle, or
income

Psychographic
Social class, lifestyle,
or personality

Behavioural
Occasions, benefits
sought, user status,
usage rate, loyalty
 Market Segmentation

Key Topics • Geographical segmentation

– Marketing mixes are
customized geographically
• Segmenting Consumer
Markets • Demographic segmentation
• Psychographic segmentation
• Segmenting Business
Markets • Behavioral segmentation
• Segmenting • Using multiple segmentation
variables
International Markets
• Requirements for
Effective Segmentation
 Market Segmentation

Key Topics • Geographical segments

• Demographic segmentation
• Segmenting Consumer – Most popular type
Markets – Demographics are closely
related to needs, wants and
• Segmenting Business usage rates
Markets • Psychographic segmentation
• Behavioral segmentation
• Using multiple segmentation
variables
No Market Segmentation
Segmented by Gender
Segmented by Age
 Market Segmentation

Key Topics • Geographic segments

• Demographic
• Segmenting Consumer segmentation
Markets • Psychographic
• Segmenting Business segmentation
Markets – Lifestyle, social class, and
personality-based
segmentation
• Behavioral segmentation
• Using multiple
segmentation variables
 Market Segmentation

Key Topics • Geographic segments

• Demographic
• Segmenting Consumer segmentation
Markets • Psychographic
• Segmenting Business segmentation
Markets • Behavioral segmentation
– Typically done first
• Using multiple
segmentation variables
 Market Segmentation

Key Topics • Geographic segments

• Demographic
• Segmenting Consumer segmentation
Markets • Psychographic
• Segmenting Business segmentation
Markets • Behavioral segmentation
• Using multiple
segmentation variables
 Market Segmentation

Key Topics • Demographic segmentation

– Industry, company size, location

• Segmenting Consumer • Operating variables

– Technology, usage status,
Markets customer capabilities
• Segmenting Business • Purchasing approaches
Markets • Situational factors
– Urgency, specific application, size
of order
• Personal characteristics
– Buyer-seller similarity, attitudes
toward risk, loyalty
 Target Marketing
• Choosing a Target-
Marketing Strategy
Requires Consideration of:
– Company resources
– The degree of product variability
– Product’s life-cycle stage
– Market variability
– Competitors’ marketing
strategies
 Target Marketing

• Evaluating Market Segments

– Segment size and growth
– Segment structural attractiveness
• Level of competition
• Substitute products
• Power of buyers
• Powerful suppliers
– Company objectives and resources
Target Marketing
Strategies
 Target Marketing
• Socially Responsible Targeting
– Some segments are at special risk:
• Children
• Inner-city
minority
consumers
• Internet
shoppers
– Controversy occurs when the methods used
are questionable.
 Exercise
• Geographic segments
• Demographic
segmentation
• Psychographic
segmentation
• Behavioral
segmentation
 Positioning

• Positioning:
– The place the product
occupies in consumers’
minds relative to
competing products.
– Typically defined by
consumers on the basis
of important attributes.
 Positioning
• Choosing a Positioning Strategy:
– Identifying possible competitive advantages
-- many potential sources of differentiation
exist:
• Products
• Services
• Channels
• People
• Image
Developing Competitive
Differentiation
Product Service

Areas for Competitive

Differentiation

Image People
 Positioning
• Choosing a Positioning Strategy:
– Choosing the right competitive advantage
• How many differences to promote?
– Unique selling proposition
– Positioning errors to avoid
• Which differences to promote?

8- 33
 Positioning
Criteria for Meaningful Differences

• Important Distinctive
• Superior Communicable
• Preemptive Affordable
Profitable
8- 34
Possible Value Propositions

8- 35
Possible Value Propositions
Possible Value Propositions
Possible Value Propositions
Group Assignment (Max 5 Students)

Make Positioning Matrix

of at least 5 restaurants
in a mall (specify the
mall) by discussing it
among groups based on
the criteria on the left
and making some
possible matrix.