Segmenting

Targeting
Positioning
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.

 Know how companies identify attractive market segments

and how they choose a target marketing strategy.

 Comprehend how companies position their products for

maximum competitive advantage.
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
2 Basic Types of Markets
(products)
 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

A product can be either a consumer product or business product,

depending on its use

 Example: Tires can be purchased by consumers for the family

car or by General Motors for its production line
Requirements of a Markets

 Need
 Ability
+  Willingness
 Authority
SEGMENTATION
Role of Market Segmentation
Marketing strategies must be adjusted to meet
the needs of different consumer groups

Market segmentation - Division of the total

market into smaller, relatively homogenous
groups

• Levels – Mass, Segment, and Niche

Why segment?

Most Most
efficient Many Groups effective
of One

One Mass
Market
Criteria for Effective
Segmentation
Market segmentation cannot be used in all cases. To be
effective, segmentation must meet the following basic
requirements.
 The market segments must be measurable in terms of both
purchasing power and size.
 Marketers must be able to effectively promote to and serve a
market segment.
 Market segments must be sufficiently large to be potentially
profitable.
 The number of segments must match the firm’s capabilities.
Segmenting Consumer Markets
No Market Segmentation
Segmented by Gender
Segmented by Age
Geographic Segmentation
 Division of an overall market into homogenous groups
based on their locations

 Marketers look at:

Economic variables
Geographic indicators
Migration patterns

 Pay close attention to fastest-growing states

Demographic Segmentation
 Division of an overall market into homogenous
groups based on:
 Gender and age
 Income and occupation
 Education
 Sexual orientation
 Household size
 Stage in the family life cycle
 Psychographic Segmentation
 Division of a population into groups that have
similar attitudes, values, and lifestyles

 Items on lifestyle surveys that describe various

activities, interests, and respondents’ opinions

Intimates - Value family and personal relationships

Fun seekers - Focus on personal enjoyment and pleasurable experiences
Creativities - Seek education, technology, and knowledge
Product-Related Segmentation
 Division of a population into homogeneous
groups based on their relationships to a
product

 Segmenting by benefits sought

 Focuses on the benefits people expect from using the
product
 Example: Women who work out at Curves want to
look their best and feel healthy
The Market Segmentation
Process
1 2 3 4

Develop a Forecast Forecast Select specific

relevant market probable market
profile for potential market share segments
each segment
TARGETING
Targeting
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
Undifferentiated Strategy

Single
Marketing
Mix

Organization
Target Market
 Differentiated Strategy
Marketing Mix 1

Marketing Mix 2
Organization

Target Market
Concentrated Strategy

Single
Marketing
Mix

Organization
Target Market
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
POSITIONING
Positioning
 Locating a brand in consumers’ minds over and
against competitors in terms of attributes and
benefits that the brand does and does not offer
 Attribute or Benefit
 Quality and Price
 Use or User
 Competition
Product Positioning
Dimensions
 Product Attributes / Differences / Benefits
 Product User / Usage
 By Association
 Problem Solution
 Against a Competitor / Away from Competitors
What is the brand position ?
Perceptual Mapping

A means of displaying or graphing,

in two or more dimensions, the
location of products, brands, or
groups of products in customers’
minds
 Perceptual Maps
Corolla Celica Avalon Camry
Expensive

Sporty Conservative

Inexpensive
 Product Positioning using
perceptual maps
High moisturizing
Zest
Tone 7
4
Lever 2000
Dove
5 2

Safeguard
Coast
Lux 8
Nondeodorant 3 Deodorant

1
Dial
Lifebuoy
Lava
6

Low moisturizing
Repositioning

Changing consumers’
perceptions of a brand in
relation to competing brands.
Positioning and Product
Differentiation
Any question?
Thank you