Principles of
Contemporary Marketing
Kurtz & Boone
Chapter 9
Market Segmentation,
Targeting, and Positioning
CHAPTER 9 Market Segmentation, Targeting, and Positioning
Chapter Objectives
1.
Identify the essential components of a market.
2.
Outline the role of market segmentation in developing a
marketing strategy.
3.
Describe the criteria necessary for effective segmentation.
4.
Explain the geographic approach to segmenting consumer
markets.
5.
Discuss the demographic approach to segmenting consumer
markets.
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CHAPTER 9 Market Segmentation, Targeting, and Positioning
Chapter Objectives
6.
Outline the psychographic approach to segmenting consumer
markets.
7.
Describe product-related segmentation.
8.
Identify the steps in the market segmentation process.
9.
Discuss the four basic strategies for reaching target markets.
10. Summarize the types of positioning strategies, and explain the
reasons for positioning and repositioning products.
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CHAPTER 9 Market Segmentation, Targeting, and Positioning
Types of Markets
o Consumer products - Products bought by ultimate
consumers for personal use
o Business products - Goods and services purchased for
use either directly or indirectly in the production of
other goods and services for resale
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CHAPTER 9 Market Segmentation, Targeting, and Positioning
The Role of Market Segmentation
o Marketing strategies must be adjusted to meet the
needs of different consumer groups
o Market segmentation - Division of the total market
into smaller, relatively homogenous groups
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CHAPTER 9 Market Segmentation, Targeting, and Positioning
Segmenting Consumer Markets
o Geographic segmentation
o Demographic segmentation
o Psychographic segmentation
o Product-related segmentation
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CHAPTER 9 Market Segmentation, Targeting, and Positioning
Geographic Segmentation
o Division of an overall market into homogenous groups
based on their locations
o Marketers look at total population, a variety of
economic variables, geographic indicators, and
migration patterns to determine market size
o Pay close attention to areas with quickly growing
populations to plan for the future
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CHAPTER 9 Market Segmentation, Targeting, and Positioning
Geographic Segmentation
o Government now classifies urban data using several
categories:
o Core based statistical area (CBSA)
o Metropolitan statistical area (MSA)
o Micropolitan statistical area
o Consolidated metropolitan statistical area (CMSA)
o Primary metropolitan statistical area (PMSA)
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CHAPTER 9 Market Segmentation, Targeting, and Positioning
Demographic Segmentation
o Division of an overall market into homogenous groups
based on variables such as gender, age, income,
occupation, education, sexual orientation, household
size, and stage in the family life cycle
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CHAPTER 9 Market Segmentation, Targeting, and Positioning
Segmenting by Household Type
o Average household size in U.S. has decreased from
5.8 in 1790 to less than 3 today
o Households vary by lifestage and the presence or
absence of children
o Growing number of same-sex couples who share
households
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CHAPTER 9 Market Segmentation, Targeting, and Positioning
Segmenting by
Income and Expenditure Patterns
o Engel’s laws
o As household income increases:
o A smaller percentage of expenditures goes for food
o The percentage spent on housing, household operations,
and clothing remains constant
o The percentage spent on recreational and educational
items increases
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CHAPTER 9 Market Segmentation, Targeting, and Positioning
Demographic Segmentation Abroad
o One source of global demographic information is the
International Programs Center (IPC) at the U.S.
Census Bureau
o IPC provides a searchable online database of
population statistics for many countries on the Census
Bureau’s Web page
o Private marketing research firms can supplement
government data
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CHAPTER 9 Market Segmentation, Targeting, and Positioning
What is Psychographic Segmentation?
o Division of a population into groups that have similar
attitudes, values, and lifestyles
o AIO statements - Items on lifestyle surveys that
describe various activities, interests, and respondents’
opinions
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CHAPTER 9 Market Segmentation, Targeting, and Positioning
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CHAPTER 9 Market Segmentation, Targeting, and Positioning
Product-Related Segmentation
o Division of a population into homogeneous groups
based on their relationships to a product
o Segmenting by benefits sought
o Segmenting by usage rates
o Segmenting by brand loyalty
o Using multiple segmentation bases
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CHAPTER 9 Market Segmentation, Targeting, and Positioning
The Market Segmentation Process
o Develop a relevant profile for each segment
o Forecast market potential
o Forecast probable market share
o Select specific market segments
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CHAPTER 9 Market Segmentation, Targeting, and Positioning
Strategies for Reaching Target Markets
o Undifferentiated marketing
o Strategy that focuses on producing a single product and
marketing it to all customers; also called mass
marketing
o Differentiated marketing
o Strategy that focuses on producing several products and
pricing, promoting, and distributing them with different
marketing mixes designed to satisfy smaller segments
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CHAPTER 9 Market Segmentation, Targeting, and Positioning
Concentrated Marketing
o Focusing marketing efforts on satisfying a single
market segment; also called niche marketing
o Approach can appeal to small firms or to firms that
offer highly specialized goods and services
o Example: Peanut Butter & Co, which appeals to
peanut butter lovers
o Can backfire if competitors target the same niche or if
market decreases
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CHAPTER 9 Market Segmentation, Targeting, and Positioning
Selecting and Executing a Strategy
o Basic determinants of marketing strategy:
o Company resources
o Product homogeneity
o Stage in the product lifestyle
o Competitors’ strategies
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CHAPTER 9 Market Segmentation, Targeting, and Positioning
Positioning
o Placing a product at a certain point or location within a
market in the minds of prospective buyers
o Possible approaches
o Attributes
o Price/quality
o Competitors
o Application
o Product user/class
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