CHAPTER
5
Segmentation,
Targeting, and
Positioning
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posted to a publicly accessible website, in whole or in part.
Chapter Objectives (slide 1 of 2)
After reading this chapter you should be able to:
1. Appreciate the importance of market segmentation for
specific consumer groups and realize that the targeting
decision is the initial and most fundamental of all marcom
decisions.
2. Understand the role of behavior segmentation in targeting
consumer groups.
3. Describe the nature of psychographic segmentation.
4. Appreciate major demographic developments such as
changes in the age structure of the population and ethnic
population growth.
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posted to a publicly accessible website, in whole or in part.
2
Chapter Objectives (slide 2 of 2)
After reading this chapter you should be able to:
5. Explain the meaning of geodemographics and
understand the role for this form of targeting.
6. Recognize that any single characteristic of
consumers—whether their age, ethnicity, or
income level—likely is not solely sufficient for
sophisticated marcom targeting.
7. Appreciate the concept and practice of brand
positioning.
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posted to a publicly accessible website, in whole or in part.
3
Positioning McDonald’s versus Starbucks
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Major Steps in the Market Segmentation
Process
Following a consideration of customer needs and benefits sought, the following
are the major steps in the market segmentation process:
• Market segmentation:
•
•
Identify bases (e.g., behavior, demographics) to segment the market
Develop profiles of resulting segments
• Market targeting:
•
•
Develop measures of segment attractiveness
Select the target segment(s)
• Market positioning:
•
•
Develop positioning for each target segment
Develop marketing mix for each target segment
See Kotler and Keller (2012), Marketing Management, 14th edition
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5
Segmentation Bases
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Figure 5.1: Classification of Four General
Targeting Characteristics
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posted to a publicly accessible website, in whole or in part.
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Behavior Segmentation Issues
• Behavior Segmentation
•
•
Describes how people behave with respect to a particular product
category or class of related products
Assumes that the best predictor of future behavior is past behavior
• Online Behavioral Targeting
•
Tracks the online site-selection behavior of users so as to enable
advertisers to serve targeted ads
• Privacy Concerns
•
Technological advances increase the ability to serve consumers at the
risk of invading their privacy
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posted to a publicly accessible website, in whole or in part.
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Figure 5.2: An Illustration of the Online Ad
Process
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posted to a publicly accessible website, in whole or in part.
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Psychographic Segmentation
Psychographics
• Describes aspects of consumers’ psychological
make-ups and lifestyles as they relate to buying
behavior in a particular product category
• Attitudes
• Values
• Motivations
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iBase Peer Crowd Psychographic Segmentation
(Lee et al., Health Promotion Practice, April 29, 2013)
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Types of Psychographic Profiles
• Customized Psychographic Profiles
•
Are typically customized to the client’s specific product
category
•
Contain questionnaire items related to the unique
characteristics of the product category
• General Purpose Psychographic Profiles
•
Can be purchased as “off-the-shelf” psychographic data
from services that develop psychographic profiles of
people independently of any particular product or service
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Table 5.1: Illustrative Statements Used In a Customized
Banking-Related Psychographic Study
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Psychographic Study of Consumers’
Banking Practices
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Figure 5.3: The 8 VALS Segments
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VALS Psychographic Segments (slide 1 of 2)
Innovators
• Successful, sophisticated, take-charge, with high selfesteem
Thinkers
• Mature, satisfied, comfortable and reflective; value
order, knowledge, and responsibility, and motivated by
ideals
Believers
• Conservative, conventional with concrete beliefs based
on traditional, established codes: family, religion,
community, and the nation, motivated by ideals
Achievers
• Motivated by the desire for achievement have goaloriented lifestyles and a deep commitment to career and
family
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VALS Psychographic Segments (slide 2 of 2)
Strivers
Experiencers
Makers
Survivors
• Trendy and fun loving, motivated by
achievement out of concern about the
opinions and approval of others
• Motivated by self-expression, young,
enthusiastic, and impulsive consumers;
quickly become enthusiastic about new
possibilities, but are equally quick to cool
• Motivated by self-expression; express
themselves and experience the world by
working on it, and have enough skills and
energy to carry out their projects
successfully
• Live narrowly-focused lives with few
resources with which to cope, often believe
the world is changing too quickly, are
comfortable with the familiar, and are
primarily concerned with safety and
security
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Geodemographic Segmentation
• Geodemographics
• Consumers who reside within geographic clusters
such as zip codes or neighborhoods and also
share demographic and lifestyle similarities
• Typical Clusters (PRIZM NE)
• Bohemian Mix
• White Picket Fences
• Suburban Pioneers
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Demographic Segmentation
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Demographic Trends
• World Population Growth
• 7.31 billion (2016) to 8.5 billion (2030)
to 9.7 billion (2050)
• Changing Age Structure in United States
• Median age will increase to 38 by 2025
• More middle-aged Baby Boomers
• Fewer children, teenagers, and young adults due to
decreased birthrates
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20
Table 5.3: World’s 25 Largest Countries as
of 2016
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posted to a publicly accessible website, in whole or in part.
21
Table 5.5: Population of the United States by
Age Group, as of 2014
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Demographic Segments by Age Group
• Preschoolers (5 years or younger)
• Elementary-school-age children (6-11 years)
• Tweens (8-12 years)
• Teenagers (13-19 years)
• Young adults (20-34 years)
• Millennials or Generation Y
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23
Figure 5.3: An Appeal to Preschoolers’
Parents
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Figure 5.4: An Appeal to Teenagers
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posted to a publicly accessible website, in whole or in part.
25
An Appeal to College Students:
“Tell Febreze What Stinks”
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26
Demographic Segments: Age
• Middle-Aged (35-54 years)
• Gen Xers or “baby busters”
• Yup & Comers, Bystanders, Playboys, Drifters
• Mature Consumers (55 years or older)
• Aging Baby Boomers
• Are 27% of the total U.S. population
• Have highest discretionary income and most assets
• Census Bureau classification: Olders (55 to 64); Elders (65
to 74); and the Very Old (75 and over)
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Figure 5.5: An Appeal to Female Baby
Boomers
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posted to a publicly accessible website, in whole or in part.
28
The Ever-Changing American Household
• Household Defined
• An independent housing entity, either rental
property or owned property.
• U.S. Households
• Growing in number, shrinking in size, and changing in
character.
• Married couples with children younger than 18 now
represent less than one-third of all households.
• Single-person and unrelated-person households are a
growing market.
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posted to a publicly accessible website, in whole or in part.
29
Ethnic Population Developments
(slide 1 of 4)
• Changes in the U.S. Melting Pot
• More diversity in the overall population
• Growth in all ethnic groups
• Implication for Marketers
• Need to devise marcom strategies to meet
ethnic groups’ unique wants/needs
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posted to a publicly accessible website, in whole or in part.
30
Table 5.5: Ethnic Groups’ Population Representation
in the United States, 2000–2050 (in millions)
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Ethnic Population Developments
(slide 2 of 4)
• African Americans
• Are of an average age that is considerably younger
than that for Caucasians
• Are geographically-concentrated, with three-fourths
of all African-Americans living in 16 states
• Tend to purchase prestige and name-brand products
in greater proportion than do Caucasians
• Have spending power that totals
nearly $1.1 trillion annually
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Figure 5.6: African-American Models Appeal
to African American Consumers
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posted to a publicly accessible website, in whole or in part.
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Ethnic Population Developments
(slide 3 of 4)
• Hispanic Americans (Latinos)
• Are the largest U.S. minority
population segment
• Are not a single unified market
• Are underserved by current
marketing efforts
• Are responsive to advertising in
their dominant language
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34
Table 5.6: Top 10 U.S. Hispanic Markets
(estimates as of 2010)
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Ethnic Population Developments
(slide 4 of 4)
• Asian-Americans
• Represent many nationalities
• Are a more recent, growing ethnic market
• Are better educated than average
• Have higher incomes than average
• Occupy more prestigious jobs
• Speak a variety of languages
• Are heavy users of the Internet
• Respond to marketing programs that reflect their values and
lifestyles
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Market Targeting:
The 5 Criteria for Effective Segmentation:
1. Measurable
2. Substantial
3. Accessible
4. Differentiable
5. Actionable
Target Market Selection Strategies:
1. Undifferentiated marketing
2. Differentiated marketing
3. Concentrated marketing
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Figure 5.7: A Framework for Brand Positioning
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posted to a publicly accessible website, in whole or in part.
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Benefit Positioning
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Categories of Appeals to Consumer Needs
Functional Needs
• Positioning communicates that the brand’s
benefits are capable of solving consumers’
consumption-related problems
Symbolic Needs
• Positioning attempts to associate brand
ownership with a desired group, role, or selfimage
Experiential
Needs
• Positioning promotes brand’s extraordinary
sensory value, or rich potential for cognitive
stimulation
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Figure 5.8: Croc Advertisement Illustrating
Appeal to Functional Needs
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posted to a publicly accessible website, in whole or in part.
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Figure 5.9: Dove Advertisement Illustrating
Appeal to Experiential Needs
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posted to a publicly accessible website, in whole or in part.
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Attribute Positioning
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Figure 5.10: Highlander Ad Illustrating ProductRelated Attribute Positioning
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Figure 5.11: Ralph Lauren Advertisement
Illustrating User Imagery Positioning
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posted to a publicly accessible website, in whole or in part.
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