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CHAPTER 5

Market Segmentation,
Targeting, and Positioning
for Competitive
Advantage

Steps in Market Segmentation,


Targeting, and Positioning

Market

Segmentation dividing a
market into distinct groups of buyers
with different needs, characteristics, or
behavior who might require separate
products or marketing mixes.
Market Targeting the process of
evaluating each market segments
attractiveness and selecting one or
more segments to enter.
Market
Positioning

formulating
competitive positioning for a product
and a detailed marketing mix.

Levels of Market
Segmentation

Levels of Market
Segmentation
1. Mass

Marketing mass producing,


mass distributing, and mass promoting
about the same product in about the
same way to all consumers.
2. Segment Marketing isolating broad
segments that make up a market and
adapting the marketing to match the
needs of one or more segments.

Levels of Market
Segmentation
3. Niche Marketing focusing on sub-

segments or niches with distinctive


traits that may seek a special
combination of benefits.
4. Micromarketing the practice of
tailoring products and marketing
programs to suit the tastes of specific
individuals and location includes
local marketing & individual marketing

Types of Micromarketing
Local Marketing tailoring brands and

promotions to the needs and wants of


local customer groups.
Individual
Marketing

tailoring
products and marketing programs to
the needs and preferences of individual
customers also labeled market-of-one
marketing customized marketing,
and one-on-one marketing.

Bases for Segmenting Consumer Markets

Bases for Segmenting Consumer


Markets
1. Geographic Segmentation dividing a

market into different geographic units


such as nation, states, regions,
countries, cities, or neighborhoods.
2. Demographic Segmentation dividing
the market into groups based on
demographic variables such as age,
gender, family size, family life cycle,
income,
occupation,
education,
religion, race and nationality.

Bases for Segmenting Consumer


Markets
3. Psychographic

Segmentation

dividing a market into different


groups based on social class,
lifestyle,
or
personality
characteristics.
4. Behavioral Segmentation dividing
markets
based
on
consumer
knowledge,
attitude,
use
or
response to a product.

Requirements for Effective


Segmentation
1. Measurable Certain segmentation

variables are measureable but


others are difficult to measure.
2. Accessible market segments can
be effectively reached and served.
3. Substantial market segments are
large or profitable enough to serve.

Requirements for Effective


Segmentation
4. Differentiable the segments are

conceptually distinguishable and


respond differently to different
marketing
mix
elements
and
programs.
5. Actionable effective programs can
be designed for attracting and
serving the segments.

Selecting Market
Segments

Selecting Market
Segments
Target Market a set of buyer sharing

common needs or characteristics that


the company decides to serve.
Undifferentiated
Marketing

a
market-coverage strategy in which a
firm decides to ignore market segment
differences and go after the whole
market with one another.

Selecting Market
Segments
Differentiated Marketing a market-

coverage strategy in which a firm


decides to target several market
segments and designs separate offers
for each.
Concentrated Marketing a marketcoverage strategy in which a firm goes
after a large share of one or a few
submarkets.

Positioning for Competitive


Advantage
Product Position the way the product is

defined by consumers on important


attributes the place the product
occupies in consumers minds relative to
competing products.
Competitive advantage an advantage
over competitors gained by offering
consumers greater value, either through
lower prices or by providing more benefits
that justify higher prices.

Selecting the Right Competitive


Advantages
How many differences to promote.
Which differences to promote.
1.
2.
3.
4.
5.
6.
7.

Important
Distinctive
Superior
Communicable
Preemptive
Affordable
Profitable