6/1/2010
Chapter 15
Market Segmentation
and Product Positioning
McGraw-Hill/Irwin
Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved.
Introduction
• Selection of the appropriate target market is
paramount to developing successful
marketing programs
• Market segmentation is based on the idea
that a single product usually will not appeal
to all consumers
15-2
Introduction cont.
• Market segmentation is the process of
dividing a market into groups of similar
consumers and selecting the most
appropriate group(s) of individuals for the
firm to serve
• Five tasks in the process of market
segmentation
15-3
1
6/1/2010
Tasks in Market Segmentation
Analyze Consumer-Product
Relationships
• Entails analysis of the affect and cognition,
behavior, and environments involved in the
purchase/consumption process for the
particular product
• Three general approaches
– Brainstorm the product concept
– Focus groups and other types of primary
research
– Secondary research
15-5
Analyze Consumer-Product
Relationships cont.
• Considerable information is available for
analyzing various markets for many
established product categories
• For many products, the initial breakdown in
markets is between the prestige and mass
markets
15-6
2
6/1/2010
Investigate Segmentation Bases
• No simple way to determine the best bases
for segmenting markets
• Four specific types of segmentation
– Benefit
– Psychographic
– Person/situation
– Geodemographic
15-7
Useful Segmentation Bases for
Consumer Markets
Useful Segmentation Bases for
Consumer Markets cont.
3
6/1/2010
Benefit Segmentation
• Benefits people seek in consuming a given
product is the basic reason for the existence
of true market segments
– Attempts to measure consumer value systems
and consumers’ perceptions of various brands
in a product class
15-10
Toothpaste Market Benefit
Segmentation
Psychographic Segmentation
• Divides markets on differences in consumer
lifestyles
– Generally follows a post hoc model
– Studies often include hundreds of questions and
provide a tremendous amount of information
about consumers
– Activity, interest, and opinion (AIO) questions
are sometimes very general
– Validity of this segmentation is sometimes
questioned
15-12
4
6/1/2010
Psychographic Segmentation cont.
– The best-known psychographic segmentation is
called VALS
• Based on two dimensions
– Vertical dimension
» Based on the degree to which they are innovative and
have resources
– Horizontal dimension
» Motivated primarily by ideals
» Motivated primarily by achievement
» Motivated primarily by self-expression
15-13
VALS™ Framework and Segments
15-14
VALSTM Framework and Segments
cont.
5
6/1/2010
Person/Situation Segmentation
• Markets can often be divided on the basis of
the usage situation in conjunction with
individual differences of consumers
– Combines not only the person and the situation,
but also other important segmentation bases
• Benefits sought
• Product and attribute perceptions
• Marketplace behavior
15-16
Person/Situation Segmentation
cont.
15-17
Geodemographic Segmentation
• Identifies specific households by
– Focusing on local neighborhood geography
– Creates classifications of actual, addressable,
mappable neighborhoods where consumers live
and shop
– PRIZM NE system
• Based on the assumptions that consumers in
particular neighborhoods are similar in many
respects and that the best prospects are those who
actually use a product or other consumes like them
15-18
6
6/1/2010
Develop Product Positioning
• Positioning the product relative to competing
products in the minds of consumers
– Key objective is to form a particular brand
image in consumers’ minds
– Accomplished by developing a coherent
strategy that may involve all of the marketing
mix elements
15-19
Develop Product Positioning cont.
– Five approaches to positioning strategy:
•
•
•
•
•
Attribute
Use or application
Product user
Product class
Competitors
15-20
Positioning by Attribute
• Associating a product with an attribute, a
product feature, or a customer feature
– A new product can be positioned with respect to
an attribute ignored by competitors
– Sometimes a product can be positioned in
terms of two or more attributes simultaneously
– The price/quality attribute dimension is
commonly used for positioning products as well
as stores
15-21
7
6/1/2010
Positioning by Use or Application
• Products can have multiple positioning
strategies, although increasing the number
involves difficulties and risks
• Often a positioning-by-use strategy
represents a second or third position
designed to expand the market
15-22
Positioning by Product User
• Positions products according to segments of
class of users that use the product/ brand
• Highlights a specific lifestyle profile
15-23
Positioning by Product Class
• Positioning of product according to product
class, usually keeping one element as the
identifying category representation
15-24
8
6/1/2010
Positioning by Competitors
• Competition is the explicit or implicit frame
of reference
– Major purpose is to convince consumers that a
brand is better than the market leader on
important attributes
– Positioning with respect to a competitor is
commonly done in advertisements in which a
competitor is named and compared
15-25
Positioning Maps
• A visual depiction of consumers’ perceptions
of competitive products, brands, or models
– Constructed by surveying consumers about
various product attributes and developing
dimension and a graph indicating the relative
position of competitors
– Can give marketers a sense of how their brands
are perceived by consumers relative to
competitors and suggest positioning strategies
15-26
Positioning Map for Automobiles
15-27
9
6/1/2010
Select Segmentation Strategy
• Four basic segmentation strategy
alternatives
– May decide not to enter the market
– May decide to be a mass marketer instead of
segmenting
– May decide to market to only one segment
– May decide to market more than one segment
and design a separate marketing strategy for
each
15-28
Select Segmentation Strategy cont.
• Marketers must have some criteria on which
to base segmentation strategy decisions
– Measurable
– Meaningful
– Marketable
15-29
Design Marketing Mix Strategy
• Selecting the target market and designing
the marketing mix go hand-in-hand
• Many marketing mix decisions are made in
conjunction with target market selections
15-30
10
6/1/2010
Summary
• Market segment was defined
• Market segmentation was analyzed in terms
of interrelated tasks
• Noted that market segmentation is a
cornerstone of sound marketing strategy
development
15-31
11