Segmentation, Targeting,

and Positioning
 Procter &
c Gamble

Sells multiple Has also identified

brands within the different niches
same product within certain
category for a segments
variety of products
Tide offers seven
Brands feature a
different mix of different product
benefits and formulations to
appeal to different serve different
segments niches’ needs
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 Definition
Market Segmentation:
?Dividing a market into distinct
groups with distinct needs,
characteristics,
or behavior who
might require
separate products
or marketing
mixes.

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 Table 8.1: Major Segmentation
Variables for Consumer Markets
Geographic
Region Pacific, Mountain, West North Central, West South Central,
East North Central, East South Central, South Atlantic,
Middle Atlantic, New England
City or metro size Under 5,000; 5,000-20,000; 20,000- 50,000; 50,000-
100,000; 100,000-250,000; 250,000- 500,000; 500,000-
1,000,000; 1,000,000-4,000,000; 4,000,000 or over
Density Urban, suburban, rural
Climate Northern southern
Demographic
Age Under 6, 6-11, 12-19, 20-34, 35-49, 50-64, 65+
Family size 1-2, 3-4, 5+

See text for complete table & for definitions

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 Figure 8-1:
Steps in Market
Segmentation, Targeting,
and Positioning

Real estate business

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 Figure 8-2:
Target Marketing
Strategies

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 Definition

Mass Marketing:
Using almost the same
product, promotion and
distribution for all
consumers

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 Definition

Segment Marketing:
Adapting a company’s
offerings so they more
closely match the needs
of one or more segments

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 Definition

Niche Marketing:
Adapting a company’s
offerings to more closely
match the needs of one or
more subsegments where
there is often little
competition

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Patterns of market
segments
Quantitative research

SmarterKids

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 Target Marketing
Target marketing requires marketers
to take three major steps:
?Identify and profile distinct groups of
buyers who differ in their needs and
preferences (market segmentation).
?Select one or more market segments to
enter (market targeting).
?For each target segment, establish and
communicate the key distinctive
benefit(s) of the company’s market
offering (market positioning).

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 Market Segmentation
Key Topics Geographical segments
Demographic
Segmenting segmentation
Consumer Markets ? Most popular type
? Demographics are closely
Segmenting related to needs, wants
Business Markets and usage rates
Segmenting Psychographic
International segmentation
Markets Behavioral
Requirements for segmentation
Effective Using multiple
Segmentation segmentation variables
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Market Segmentation
Demographic
Segmentation Variables
Age Occupation
Gender Education
Family size Religion
Family life cycle Generation
Income Nationality
Race
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 Market Segmentation
Key Topics Measurable
? Size, purchasing power, and
profile of segment
Segmenting
Accessible
Consumer Markets ? Can be reached and served
Segmenting Substantial
Business Markets ? Large and profitable enough
to serve
Segmenting
International Differentiable
? Respond differently
Markets
Actionable
Requirements for ? Effective programs can be
Effective developed
Segmentation
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 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

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 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
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Positioning
Positioning:
?The place the product
occupies in
consumers’ minds
relative to competing
products.
?Typically defined by
consumers on the
basis of important
attributes.

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 Positioning
Choosing a Positioning Strategy:
?Identifying possible competitive
advantages -- many potential
sources of differentiation exist:
? Products
? Services
? Channels
? People
? Image

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Porsche is
positioned on
the basis of
performance
and freedom.

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 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?

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 Positioning
Criteria for Meaningful Differences

Important Distinctive
Superior Communicable
Preemptive Affordable
Profitable
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 Figure 8-3:
Possible Value Propositions

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 Positioning

Choosing a Positioning Strategy:

?Communicating and delivering the
chosen position
? Entire marketing mix must support the
chosen strategy
? May require changes to the product,
pricing, distribution or promotion.

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 Marriot

Pioneer in segmenting ...

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