PRINCIPLES OF MARKETING

Market Segmentation,
Targeting, and Positioning
for Competitive Advantage
 STEPS IN SEGMENTATION,
TARGETING, AND POSITIONING

6. Develop Marketing
Mix for Each Target Segment Market
5. Develop Positioning Positioning
for Each Target Segment
4. Select Target
Segment(s) Market
3. Develop Measures Targeting
of Segment Attractiveness
2. Develop Profiles
of Resulting Segments
Market Segmentation
1. Identify Bases
for Segmenting the Market
 Micromarketing
Micromarketing
Products
Productsto
tosuit
suitthe
thetastes
tastesof
ofindividuals
individualsor
orlocations
locations
(complete
(completesegmentation)
segmentation)
Niche
Niche Marketing
Marketing
Different
Differentproducts
productsto
tosubgroups
subgroupswithin
withinsegments
segments
((more
moresegmentation)
segmentation)
Segment
Segment Marketing
Marketing
Different
Differentproducts
productsto
toone
oneor
ormore
moresegments
segments
(some
(somesegmentation)
segmentation)
Mass
Mass Marketing
Marketing
Same
Sameproduct
productto
toall
allconsumers
consumers
(no
(nosegmentation)
segmentation)
LEVELS OF MARKET SEGMENTATION
STEP 1. MARKET SEGMENTATION
STEP 1. MARKET SEGMENTATION
BASES FOR SEGMENTING CONSUMER MARKETS

Geographic
Nations, states,
regions or cities

Demographic
Age, gender, family size
and life cycle, or
income

Psychographic
Social class, lifestyle, or
personality

Behavioral
Occasions, benefits,
uses, or responses
STEP 1. MARKET SEGMENTATION
BASES FOR SEGMENTING BUSINESS MARKETS

Personal Demographics
Characteristics

Bases
Bases
for
for Segmenting
Segmenting
Situational Business
Business Operating
Factors Markets
Markets Characteristics

Purchasing
Approaches
STEP 1. MARKET SEGMENTATION
BASES FOR SEGMENTING INTERNATIONAL MARKETS

Industrial
Industrial Markets
Markets

Political/
Political/
Geographic
Geographic Economic
Economic Legal
Legal

Cultural
Cultural
STEP 1. MARKET SEGMENTATION
REQUIREMENTS FOR EFFECTIVE SEGMENTATION

Measurable
Measurable
• Size, purchasing power, profiles
of segments can be measured.
Accessible
Accessible
• Segments must be effectively
reached and served.

Substantial
Substantial • Segments must be large or
profitable enough to serve.

Differential
Differential • Segments must respond
differently to different marketing
mix elements & actions.

Actionable
Actionable • Must be able to attract and serve
the segments.
 STEP 2. MARKET TARGETING
EVALUATING MARKET SEGMENTS

 Segment Size and Growth

 Analyze sales, growth rates and expected profitability.

 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.
 C. Concentrated Marketing
Segment
Segment33
Company
Company
Segment
Segment22 Marketing
Marketing
Mix
Mix
Segment
Segment11
B. Differentiated Marketing
Company
Company
Segment
Segment33 Marketing
MarketingMix
Mix33
Company
Company
Segment
Segment22 Marketing
MarketingMix
Mix22
Segment Company
Company
Segment11
Marketing
MarketingMix
Mix11
A. Undifferentiated Marketing
Company
Company
Market
Market Marketing
Marketing
Mix
Mix
MARKET COVERAGE STRATEGIES
STEP 2. MARKET TARGETING
STEP 2. MARKET TARGETING
CHOOSING A MARKET-COVERAGE STRATEGY

Company
Resources

Product
Variability

Product’s Stage
in the Product Life Cycle

Market
Variability

Competitors’
Marketing Strategies
STEP 3. POSITIONING FOR COMPETITIVE
ADVANTAGE

 Product’s Position - the place the product occupies

in consumers’ minds relative to competing
products; i.e. Volvo positions on “safety”.

 Marketers must:
 Plan positions to give products the greatest advantage
 Develop marketing mixes to create planned positions
 Users
Users
F
Usage
Usage F
B
B Against
Againstaa
E
E
Occasions
Occasions D
D Competitor
Competitor
A
A
C
C H
H
G
G
Benefits
Benefits Away
Awayfrom
from
Offered
Offered Competitors
Competitors
Product
Product Product
Product
Attributes
Attributes Class
Class
ADVANTAGE: STRATEGIES
STEP 3. POSITIONING FOR COMPETITIVE
STEPS TO CHOOSING AND IMPLEMENTING
A POSITIONING STRATEGY

 Step 1. Identifying a set of possible competitive

advantages: Competitive Differentiation.

 Step 2. Selecting the right competitive

advantage.

 Step 3. Effectively communicating and

delivering the chosen position to the market.
Image
Image Personnel
Personnel
Areas
Areas for
for Competitive
Competitive
Differentiation
Differentiation
Service
Service Product
Product
DIFFERENTIATION
DEVELOPING COMPETITIVE
 Communicable
Communicable Preemptive
Preemptive
Promote
Superior
Superior
to Affordable
Affordable
Differences
Which
Determining
for
Criteria
Distinctive
Distinctive Profitable
Profitable
Important
Important
ADVANTAGES
SELECTING THE RIGHT COMPETITIVE