Segmenting, Targeting and

Positioning: Building Right

Relationships with Right
Customers

Chapter 7
Group 4
 Steps in Segmenting, Targeting and
Positioning

MARKET TARGET MARKET

SEGMENTATION MARKETING POSITIONING

-Identify bases -Develop -Develop

positioning for
for segmenting masure of target segments
the market segment
attractiveness -Develop a
-Develop marketing mix
segment -Select target for each segment
profiles segments
Market Segmentation

Dividing a market into smaller

groups (segments) of buyers
with distinct needs,
characteristics or behavior who
might require separate
products or marketing mixes.
Target Marketing
Evaluating each market
segment’s attractiveness
and selecting one or
more of the market
segments to enter.
Market Positioning
Setting the competitive
positioning for the
product and creating a
detailed marketing
mix.
Market Segmentation
Segmenting Consumer
Markets
 Geographic Segmentation
Demographic Segmentation
Psychographic Segmentation
Behavioral Segmentation
Geographic Segmentation

Dividing the market into

different geographical
unit such as nations,
regions, states,
countries,cities or even
neighborhood
Geographical
Segmentation

McDonald in Middle East offers any kind of

meal that is chicken or beef
Geographical
Segmentation

McDonald in New Zealand, offers

KiwiBurger. Kiwi is a local basic food to
its country.
Geographical
Segmentation

Main idea to serve coke is when it is

cold so Coca-cola focuses on hot areas

of the world. .
 Demographic Segmentation

Divides the market into groups

based on variables such as age,
gender, family size, family life
cycle, income, occupation,
education, religion, race,
generation, and nationality.
Demographic Segmentation
•Age & life-cycle
Segmentation
•Gender Segmentation
•Income Segmentation
Demographic
Segmentation
Age & life Cycle
Segmentation

Colgate for Kids & Colgate Total

Demographic
Segmentation

Age & Life Cycle

Segmentation

Baby Bench &Bench

Demographic
Segmentation
Gender
Segmentation
For small income, Coke has small returnable glasses price ranges from P7-12. For middle people, it has non-returnable bottle

Demographic
Segmentation
Income
Segmentation:
PSYCHOGRAPHIC
SEGMENTATION
Dividing the market into
different groups based on
social class, lifestyle or
personality characteristics.
PSYCHOGRAPHIC
SEGMENTTION

•Social Class
•Lifestyle
•Personality
Social Class
Different
consumers fall in
different social
classes. This
depends mainly on
their buying power.
The buying power is
affected by the
background of the
customer, his
income as well as
his spending habits.
 Lifestyle
EVERYONE HAS DIFFERENT
CLOTHING HABITS BASED ON
THEIR LIFESTYLES. THE
CUSTOMER MIGHT BE SCHOOL
GOING, COLLEGE GOING,
OFFICE GOING OR OTHER.
 Personality
Personality in psychographic
segmentation is dependent on both –
lifestyle as well as social class. A person
will have a rich personality only if he has
high buying power as well as the taste in
clothes to maintain such a lifestyle.
(
 BEHAVIORAL
SEGMENTATION
•Dividing a market into groups
based on consumer knowledge,
attitude, use or response to a
product.
 BEHAVIORAL
SEGMENTATION
•Occasion Segmentation
•Benefits Sought
•User Status
•Usage Rate
•Loyalty Status
Occasion
Segmentation
Dividing a market
into groups
according to
occasions where
buyers get the idea
to buy, actually
make their
purchase or use the
purchased item.
Benefit
Segmentation
Dividing the market into
groups according to the
different benefits that the
consumers seek from the
product.
Requires finding the major
benefits people look for in
the product class, the kinds
of people who look for each
benefits and the major
brands that deliver each
benefit
User Status Usage Rate
• Markets can be •Markets can also
segmented into be segmented into
groups of nonusers, light, medium and
ex-users, potential
heavy product
users, first time users
and regular users of a users
product.
 Loyalty Status

Consumers can be loyal to

brands, store and
companies.
Using Multiple Segmentation
Bases
Example of mulitvariable
segmentation is
Geodemographics
Segmentation.
Leading lifestyle segmentation systems
is the PRIZM
PRIZM:

Potential Rating Index for

Zip Markets
Marketers can use MyBestSegments to guide
marketing campaigns and media strategies
for specific market segments by answering:

Who are the potential customers?

What are they like?
Where can I find them?
How can I reach them?
Examples of PRIZM Segmentation
Systems:
•“Blue blood estates” – suburban areas
populated by elite, super-rich families.
•“shotguns & pickups” - populated by rural
blue-collar workers & families.
•“hispanic mix” – cluster are highly brand
conscious, quality conscious and brand loyal.
•“money & brains” – they buy a lot of books.
 Segmenting Business Markets

Operating Characteristics Purchasing Approaches

Situational Factors Personal Characteristics

Segmenting International Markets

Geographic Location

Economic Factors

Political and Legal Factors

Cultural Factors
Intermarket segmentation-
Forming segments of
consumers who have similar
needs and buying behavior
even though they are located
in different countries.
 Requirements for Effective
Segmentation
Measurable Accessible

Substantial

Differentiable Actionable
Target Marketing
Evaluating Market
Segments
Evaluating Market Segments
Segment Size and Growth
Analyze current segment sales, growth rates,
and expected profitability.
Segment Structural Attractiveness
Consider effects of: competitors, existence of
substitute products, and the power of buyers &
suppliers.
Company Objectives and Resources
Examine company skills & resources needed
to succeed in that segment.
Offer superior value and gain advantages over
competitors.
Selecting Target Market
Segments

Target Market
consists of a set of buyers
who share common needs or
characteristics that the company
decides to serve.
Target Marketing Strategies
Undifferentiated (mass) Marketing

Firm decides to ignore market segment differences

and target the whole market with one offer.

Focus is on common (not different) needs of the

consumers.
Differentiated (segmented) Marketing

Firm targets several market segments and

designs separate offers for each.

•The goal is to have higher sales and a

stronger position with each market segment.
Concentrated (niche) Marketing

Firm goes after a large share of one or a

few segments or niches.
 Micromarketing
Practice of tailoring products & marketing
programs to the needs and wants of specific
individuals and locations.
Local Marketing: Tailoring brands and
promotions to the needs and wants of local
customer groups—cities, neighborhoods, specific
stores.

Individual Marketing: Tailoring products

and marketing programs to the needs and
preferences of individual customers.
Choosing a Target Marketing
Strategy
Company Resources

Product Variability

Product’s Life-Cycle Stage

Market Variability

Competitors’ Marketing Strategies

 Socially Responsible Target
Marketing
Smart targeting helps both companies and
consumers.
Target marketing sometimes generates
controversy and concern.
•Vulnerable and disadvantaged can be targeted.
•Cereal, cigarette, beer, and fast-food marketers have
received criticism.
•Internet has raised fresh concerns about potential
targeting abuses.
Positioning for Competitive
Advantage
Product Position

Is the way the product s defined by

consumers on important attributes –
the place the product occupies in
consumers’ minds relative to
competing products.
Positioning Map
Positioning
maps for
Large luxury
SUVs
 Choosing a Positioning Strategy

#1 Identify a
set of possible #2 Choose the right
competitive advantages on competitive advantages
which to build a position

#3 Select an overall
positioning strategy