Segmenting, Targeting, and

Positioning
 Steps in Market Segmentation,
Targeting, and Positioning
Market Market Market
Segmentation Targeting Positioning
1. Identify 3. Evaluate 5. Identify
segmentation attractiveness possible
positioning
variables and of each concepts for
segment the segment each target
market segment
4. Select the
2. Develop target 6. Select,
profiles of segment(s) develop, and
communicate
resulting the chosen
segments positioning
concept
 Basic Market-Preference Patterns
(a) Homogeneous (b) Diffused (c) Clustered
preferences preferences preferences
Creaminess

Creaminess

Creaminess
Sweetness Sweetness Sweetness
 Market Aggregation The
Strategy of Mass Marketing
Advantages & Disadvantages

Product Differentiation
 Step 1. Market Segmentation
Levels of Market Segmentation
Mass Marketing
Same product to all consumers
(no segmentation)
Segment Marketing
Different products to one or more segments
(some segmentation)
Niche Marketing
Different products to subgroups within segments
(more segmentation)
Micromarketing
Products to suit the tastes of individuals and locations
(complete segmentation)
Local Marketing Individual Marketing
Tailoring brands/ promotions Tailoring products/ programs
to local customer groups to individual customers
Market Segmentation
Subdividing the Market
Steps in the Market Segmentation
Process
Determine Market Boundaries
Decide Which Segmentation Variables to
Use
Collect and Analyze Segmentation Data
Develop a Profile of Each Segment
Target Segments to be Served
Design a Marketing Plan
 Bases for Segmenting
Consumer Markets
Geographic
Region, City or Metro
Size, Density, Climate Demographic
Age, Gender, Family size
and Fife cycle, Race,
Occupation, or Income ...

Psychographic
Lifestyle or Personality

Behavioral
Occasions, Benefits,
Uses, or Attitudes
 Step 1. Market Segmentation
Bases for Segmenting Business Markets

Personal
Demographics
Characteristics

Bases
for Segmenting
Situational Business Operating
Factors Markets Characteristics

Purchasing
Approaches
 Effective Segmentation
Size, purchasing power,
Measurable profiles of segments can
be measured.

Substantial Segments must be large or

profitable enough to serve.

Segments can be
Accessible effectively reached and
served.

Segments must respond

Differential differently to different
marketing mix elements &
actions.

Must be able to attract and

Actionable serve the segments.
 Descriptive Bases
Age
Gender
Income
Occupation
Education
Family Size or Family Life Cycle
Religion or Nationality
 Geographic Bases
Region
Density
Climate
Population
 Behavioral Bases
User Status & Brand Loyalty
Personality/Lifestyle
Social Class
Occasion
Readiness to Buy
Benefits Sought
Usage Rate
 Heavy and Light Users of Common
Consumer Products
PRODUCT (% USERS) HEAVY HALF LIGHT HALF
Soups and
detergents (94%) 75% 25%
Toilet tissue (95%) 71% 29%
Shampoo (94%) 79% 21%
Paper towels (90%) 75% 25%
Cake mix (74%) 83% 17%
Cola (67%) 83% 17%
Beer (41%) 87% 13%
Dog food (30%) 81% 19%
Bourbon (20%) 95% 5%
Single Versus Multiple Variable
Segmentation
 Step 2. Market Targeting
Evaluating Market Segments
Segment Size and Growth
Analyze sales, growth rates and expected profitability
for various segments.
Segment Structural Attractiveness
Consider effects of: Competitors, Availability of
Substitute Products and, the Power of Buyers &
Suppliers.
Company Objectives and Resources
Company skills & resources relative to the segment(s).
Look for Competitive Advantages.
 Five Patterns of Target Market
Selection
Single-segment Selective Product
concentration specialization specialization
M1 M2 M3 M1 M2 M3 M1 M2 M3
P1 P1 P1
P2 P2 P2
P3 P3 P3
Market Full market
specialization coverage
M1 M2 M3 M1 M2 M3
P1 P1
P = Product
M = Market P2 P2
P3 P3
 Step 2. Market Targeting
Market Coverage Strategies
Company
Marketing Market
Mix

A. Undifferentiated Marketing
Company
Marketing Mix 1 Segment 1
Company
Segment 2
Marketing Mix 2
Company
Segment 3
Marketing Mix 3
B. Differentiated Marketing

Segment 1
Company
Marketing Segment 2
Mix
Segment 3

C. Concentrated Marketing
 Step 2. Market Targeting
Choosing a Market-Coverage Strategy
Company
Resources

Product
Variability

Products Life-Cycle
Stage

Market
Variability

Competitors
Marketing Strategies
Positioning the Offering
Positioning is the act of
designing the companys
offering and image to
occupy a distinctive
place in the the target
markets mind. P 298
 The BCG Competitive
Advantage Matrix
Number of Approaches
to Achieve Advantage
Few Many
Advantage
Size of the

Large Volume Specialized

Small Stalemated Fragmented

 Product Differentiation

Conform-
Fea- Perfor-
Form Quality ance
tures mance
Quality

Dura- Relia- Repair-

Style Design
bility bility ability
 Services Differentiation

Ordering Customer
Installation

Miscellaneous
Ease Consulting

Services
Customer Maintenance
Delivery
Training & Repair
 Differentiation

Personnel
Channel
Image Differentiation

Media Atmosphere

Symbols

Events
 Important

Profitable Distinctive

Differences Worth
Establishing
Affordable Superior

Preemptive
 Perceptual Map
Live shows 1.0
Easy to reach Little waiting
Good food 0.8
Fantasy Educational,
0.6 animals
Exercise Marineland
0.4
Fun rides Knotts of the
Berry Japanese Pacific
0.2 Deer Park
Disneyland Farm

-1.6 -1.4 -1.2 -1.0 -0.8 -0.6 -0.4 -0.2 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6
-0.2
Magic Lion
Mountain -0.4 Country
Busch Safari
-0.6 Gardens
-0.8 Economical
 Positioning Strategies
Product Attributes
Benefits, Problem Solutions & Basic Needs
Price & Quality
Specific Use
Against Other Products
Product User
Against a Competitor