SEGMENTATION TARGETING AND POSITIONING

September 2013, IMT Ghaziabad

Session Outline

Why Segmentation? Segmentation introduce Basis of Segmentation Evaluating segments for Targeting Strategies for Targeting Caselets and discussion

Group of Customers

Bases for Segmenting Consumers

Geographic

Demographic

Psychographi

Behavioral

Geographic Segmentation

Geoclustering

Geographical segmentation

Segmenting based on one variable . Claritas Example

Demographic Segmentation

Demographic Segmentation
Age and Life-cycle Stage Gender Income

Age and Life-Cycle Stage

Gender
Women:
Influence 80% of consumer purchases Make 75% of new home decisions Purchase 60% of cars

Income

Psychographic Segmentation

Psychographic Segmentation
Personality traits Lifestyle Values

Behavioral Segmentation
Initiator

Usage occasions User status

Influencer

User

Usage rate Buyer-readiness

Buyer

Decider

Loyalty status

Decision Roles

User and Usage

Needs and

Behavioral Segmentation

Bases for Segmenting B2B Markets

Demographic Operating Variables Purchasing Approach Situational Factors Personal Characteristics
Industry, company size, location Technology, user status, customer capabilities Power structure, nature of existing relationship Urgency, specific application, size of order

Buyer-seller similarity, loyalty, risk attitude

Market Targeting
Effective Segmentation Criteria Measurable Substantial Accessible Differentiable Actionable

Mass Marketing Strategy

Multisegment Strategy

Multi-Segment Strategy

Perhaps the most effective segmentation strategy

Marriott.com

Market Concentration Strategy

Niche Marketing Strategy

Market-product grid showing how different Reebok shoes reach segments of customers with different needs

Patterns of Target Market Selection

Think about it 1

If your firm, represented by Us below, wants to target the price sensitive market, which competitor should it be most concerned with? How would that competitor likely react to your firm targeting this market?

Think about it 2

Which market would you recommend this firm pursue and why?

Think about it 3

A large, Boston-based consulting agency frequently conducts segmentation studies for its clients. The following are segmentation data to assist their advice to two different clients. Each is a Venn diagram describing some demographic and psychographic findings. Figure A depicts the proportion of a recent sample of shoppers at a national grocer who indicated interest in a new gourmet Lean Cuisine product. Figure B depicts the proportion of owners of a game console (obtained from registration cards of the base system) who indicated interest in a new game.

Think about it 3

If you worked at this consulting agency, which segments would you suggest each client target, and why?
Segmentation Data A Segmentation Data B

Extraverts

College men

Males 13-21

Single women
Single men, Over 50

Males 9-12

education

Uppermiddle class Families with 2+ kids

Males 22-35

Females 9-12

Females 13-35

In the United States, the Harry Potter series of books were often at the top of The New York Times fiction best-seller list. These books have been marketed to preteen, teen, and adult readers around the world. Scholastic, the publisher of the Harry Potter books is using which segmentation strategies?

Proctor & Gamble Co. (P & G) decided to skip a generation of consumers when it began to market Old Spice deodorant. The target market is men aged 18 to 34, who dont remember the Old Spice brand sold to their grandfathers many years ago. P & G is using which type of segmentation variable?

Many companies have cut travel budgets, so that very few business people are authorized to fly first class. Despite the shrinking pool of business-class travelers, British Airways (BA) has grown market share for its transatlantic business class by offering greater comfort. Promotions to frequent fliers stress that passengers can sleep in fully reclining seats and arrive refreshed to carry out a full day's schedule. BA's strategy is an example of?

Custom Foot runs six retail locations. At first glance none look any different from your basic old-fashioned shoe store, but the only boots on hand are display models. There's no inventory for sale, and customers go home empty-handedat least initially. Customers browse the store, mixing and matching design components such as style, color, and leather type. About 100 display boots provide style guidelines. Once you choose a boot style, you select materials, colors, and textures. Custom Foot guarantees your boots will be ready within three weeks. This is an example of?

Between two and three percent of the population have some degree of allergic reaction, usually mild, to preservatives used in salad bars. Restaurants might consider people with these "allergies" as a separate segment. So these restaurants will need to have their regular salad bar plus a special salad bar for the allergies segment. This multiple product and multiple market segment strategy would have the greatest difficulty meeting which of the following criteria used to form market segments?

Campbells found that its canned nacho cheese sauce, which could be heated and poured directly onto nacho chips, was too hot for Americans in the East and not hot enough for those in the West and Southwest. Today, Campbells plants in Texas and California produce a hotter nacho cheese sauce than that produced in the other plants. Campbells is using __________ segmentation

A national car rental firm targets 50 percent of its advertising to salespeople who rent a car over 40 weeks per year. Its market is likely segmented by?

Magnavox sells its target markets many different types of TVs from flat screens to a 20combination TV/DVD. The larger sets can be outfitted with surround sound at a higher price than the small set. The small set is much less expensive and allows the viewer to watch a DVD without extra equipment. Magnavox is using which type of segmentation variable in this example?

A rehabilitation center wants to target women in their 20s who have received some permanent disability as the result of a skiing accident. In terms of the criteria used for selecting a target segment, this market would?

Caselet 1

Shows the market-product grid for a Wendys restaurant next to a large urban university campus.

Caselet 1

The best way to describe how the student market is segmented is by Assume the large market (shown by a 3) is 3 times the size of the small market (shown by a 1). Similarly, assume the medium market (shown by a 2) is twice the size of the small market. The meal occasion (product grouping) that comprises the largest market is

Caselet 1

Assume the large market (shown by a 3) is 3 times the size of the small market (shown by a 1). Similarly, assume the medium market (shown by a 2) is twice the size of the small market. The largest potential market segment is for? The strategy to increase revenues that would be most likely to exploit marketing synergies and efficiencies is trying to reach ?

Caselet 1

Assume students who live in dormitories or apartments on or near the campus cannot use student parking lots. Placing flyers under windshield wipers of cars parked in student parking lots on weekdays between 7:00 AM and 4:00 PM that offer a $2 off coupon on any meal during spring term would be especially targeted at potential Sending out coupons for 10 percent off all purchases between 2:00 PM and 4:30 PM during fall term would be especially targeted at potential

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