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Chapter 3:

Segmentation,
Targeting, Positioning

Segmentation, Targeting, &


Positioning:
Market Segmentation
Divide a mkt into distinct groups with different
needs, characteristics, or behviours.

Market Targeting
Evaluate each mkt segments attractiveness
select one or more of the segments to enter.

Market Positioning
Set the competitive positioning for the product
Develop mktg mix for each target segment.

1.0 Market Segmentation:


Bases for Segmenting Consumer
Markets
Geographic:
Nations, states, regions or cities.
Demographic:
Age, gender, family size & life cycle, or income
Psychographic:
Social class, lifestyle, or personality.
Behavioural:
Occasions, benefits, status, usage, or loyalty.

1.0 Market Segmentation:


Segmenting Business Markets
Demographics:
Industry, Company Size, & location
Operating Characteristics:
Technology, User/nonuser status
Purchasing Approaches:
Power structure, relationship, criteria
Situational Factors:
Urgency, Specific application, size of order
Personal Characteristics:
Buyer-seller similarity, Risk-taking, loyalty

1.0 Market Segmentation:


Segmenting International Markets
Geographic :
Regions, Pacific Rim (Differ cuturally & economically)
Economic:
Group by population income levels or econ. developmt.
Legal :
Stability of governmt, monetary policy, & bureaucracy
Cultural :
Languages, religions, attitudes, & customs.
Intermarket:
Form segments with similar needs & buying behaviour

1.0 Market Segmentation:


Requirements for Effective Segmentation
Measurable :
Size, purchasing power, profiles of segments.
Accessible:
Must be effectively reached & served.
Substantial:
Must be large or profitable enough to serve
Differential:
Must respond differently to different mktg mix
elements
Actionable:
Must be able to attract & serve the segments.

2.0 Market Targeting:


Evaluating Market Segments
Size & Growth:
Analyse sales, growth rates &profitability
Structural Attractiveness
Competitors, substitute, power of buyer
Comps Objs & Resources :
Skills & resources, competitive Advantage

2.0 Market Targeting:


Selecting Market Segments
Undifferentiatied Marketing
Go after the whole mkt, ignore mkt segment
differences
Cost economies, BUT heavy competition
Differentiated Marketing
Target several mkt segments & designs
separate offers for each...
Cost more: R&D, forecasting, analysis,
promotion, channel

2.0 Market Targeting:


Selecting Market Segments (cont):
Concentrated Marketing (Specialise in..)
Goes after a large share of one or a few submkts
(Niche)
High risk; larger competitor; technology urges mass
mkters
Choosing a Market-Coverage Strategy
Company resources
Degree of Product Variability
Products stage of life cycle
Market Variability
Competitors marketing strategy

3.0 Positioning for Competitive


Advantage
What is Market Positioning?
Defined by consumers on important attributes.
Perceptions, impressions, & feelings that one holds for
things
Positioning Strategies
Product Attributes (BMW - Performance; Benz-Luxury)
Usage Occasions
Classes of Users (J&J baby shampoo - Children & Adults)
Against a Competitors (Citibank card VS. American
Express)
Away from Competitors (7-Up positions itslef as UnCola)
Product Classes (Margarines VS. Butter, Cooking Oils)

3.0 Positioning
A. Identify Possible
Competitive Advantage

B. Select the Right


Competitive Advantage

Product Differentiation

Unique Selling Proposition

Services Differentiation
Personnel Differentiation
Image Differentiation

Underpositioning
Overpositioning
Confused Positioning

D. Communicating the
Chosen Position

C. Differences
to Promote

Deliver the Position


Design Mktg Mix
Monitor & Adapt over the time
Avoid Abrupt change

Preemptive
Important
Affordable
Distinctive
Profitable
Superior
Communicable