Segmentation, Targeting, and Positioning
MKTG2501
Introduction to Marketing
HKU Business School
Prof. Hui Li
• Segmentation
• Geographic
• Demographic
• Psychographic
• Behavioral
• Targeting
• Undifferentiated Marketing
• Differentiated Marketing
• Concentrated Marketing
• Micro Marketing
• Positioning
• 4 steps positioning process
Segmentation, Targeting, and Positioning
Course Roadmap
Part I. Defining Marketing and the Marketing Process
•
Introduction and the marketing process
•
Company and marketing strategy
Part II. Understanding the Marketplace and Customer Value
•
Assessing (global) marketing environment
•
Understanding customer behaviors
•
Managing marketing information
Part III. Customer-Driven Marketing Strategy
•
Segmentation, targeting, and positioning
Part IV. Designing Integrated Marketing Programs
•
Product, services, and branding
•
New product development and PLC
•
Pricing and marketing channel
•
Integrated marketing communication
Segmentation, Targeting, and Positioning
Mass Marketing
• Mass Marketing: Same product and marketing mix
for everyone.
• Efficient
• Drawbacks?
Segmentation, Targeting, and Positioning
Example
hotel industry
-business travellers
(budget minded)
Segmentation, Targeting, and Positioning
Marriott Brands
different brands targetting different customers
Segmentation, Targeting, and Positioning
Segmentation, Targeting & Positioning
• Segmentation: Process of dividing markets into distinct
subsets of consumers with common needs and
characteristics.
• Select one or more segments to target
• Position with unique marketing mix relative to
competitive offerings
Segmentation, Targeting, and Positioning
Segmentation
Segmentation, Targeting, and Positioning
Why Segment?
1.
Consumer heterogeneity:
2.
An average product does not appeal to anyone.
Segmentation, Targeting, and Positioning
Segmentation
• Allows established companies to expand markets.
• Allows new companies to find niches.
• Identify specific wants and needs of groups of
consumers.
• Reposition existing products
• Determine appropriate media
Segmentation, Targeting, and Positioning
Segmentation
How to Segment Consumer Markets?
Segmentation, Targeting, and Positioning
Geographic Segmentation
• Geographic segmentation
• Dividing a market into different geographical units
such as nations, provinces, regions, parishes, cities,
or neighborhoods.
• Examples
• World region or country
• Density: Urban, suburban, rural
• Climate
• Zip Code
Segmentation, Targeting, and Positioning
Geographic Segmentation
In India, KFC fulfills its customers demand geographically. In
South India, vegetarians are the main selling products, while
in North India focus Chicken products.
Segmentation, Targeting, and Positioning
Geographic Segmentation
Walmart tailor their products to who the consumer is in the region. For
example, Wal-Marts in Colorado stock more organic items than they do in
Southern Carolina.
Segmentation, Targeting, and Positioning
Demographic Segmentation
• Demographic segmentation
• Dividing the market into segments based on variables
such as age, life-cycle stage, gender, income, occupation,
education, religion, ethnicity, and generation.
• The most popular bases
• Examples
• Age, Gender, Income, Education, Occupation
• Marital Status
• Cohort
• Family life cycle: Young and single; married with no children;
married with children
Segmentation, Targeting, and Positioning
Demographic Bases: Gender
Segmentation, Targeting, and Positioning
Demographic Bases: Gender
GoldieBlox markets engineering toys for girls. “Move over Barbie, there is
a new girl in town. And she is wearing overalls and construction boots.”
Segmentation, Targeting, and Positioning
Demographic Bases: Family life cycle
Segmentation, Targeting, and Positioning
Demographic Bases: Family life cycle
• E.g., a 40-year-old woman, college education, middle
income
• How would her consumption pattern look like if she is
•
•
•
•
Single
Married no children, DINKs
Married with two young children
Married with a 20-year-old child
Segmentation, Targeting, and Positioning
Demographic Bases: Family life cycle
Wholesale stores like Costco and Sam’s Club targets large-basket users
such as “full nests”.
Segmentation, Targeting, and Positioning
Demographic Bases: Income
Toyota Lexus for high end roaders, Camry for the middle end, and Corolla for low end
Segmentation, Targeting, and Positioning
Psychographic Segmentation
• Psychographic Segmentation:
• Dividing a market into different segments based on social
class, lifestyle, or personality characteristics.
Panera caters to a healthy eating lifestyle
segment of people who want more than
just good-tasting food—they want food
that’s good for them, too.
Segmentation, Targeting, and Positioning
Behavioral Segmentation
• Behavioral Segmentation
• dividing a market into segments based on consumer
knowledge, attitudes, uses of a product, or responses to a
product.
• Segmentation bases
• Occasions: Regular occasion; special occasion; holidays;
seasonal
• Benefits: Quality, service, economy, convenience, speed
• User status: Nonuser, ex-user, potential user, first-time user,
regular user
• User rates: Light user, medium user, heavy user
• Loyalty status
Segmentation, Targeting, and Positioning
Behavioral Bases: Occasions
Peeps creates different shaped marshmallow treats for special holidays
when it captures most of its sales but advertises that Peeps are “Always
in Season” to increase the demand for non-holiday occasions.
Segmentation, Targeting, and Positioning
Behavioral Bases: Occasions
Interestingly, Pepsi at one time was trying to market
a cola product for breakfast.
This made sense to the company since many people
eat breakfast at a fast-food restaurant such as
McDonald's or Burger King.
However, most people do not think cola beverages
make sense for breakfast and the product did not
succeed.
Segmentation, Targeting, and Positioning
Behavioral Bases: Benefits
P&G sells multiple brands within the
detergent category. Brands feature a
different mix of benefits and appeal
to different segments. Seven different
product formulas are offered to serve
different niches’ needs.
Brand
Tide
Attribute
All-purpose cleaning
Cheer
Color protection
Bold
Fabric softener / fuzz
Gain
Clean, fresh smell
Era
Tough stain removal
Ivory Snow
Dreft
Mild cleansing
Rinses clean, sensitive skin
(for kids)
Segmentation, Targeting, and Positioning
Behavioral Bases: Benefits
Toothpaste offers three distinct benefits, each of which will appeal to a different
audience segment.
One benefit relates to a tooth decay deterrent; the second, to a tooth whitener; and
the third, to a mouth freshener.
Segmentation, Targeting, and Positioning
Behavioral Bases: Loyalty Status
Buyers can be divided into groups according to their degree of
loyalty.
• Some consumers are completely loyal.
• Some consumers are somewhat loyal --- they are loyal to
two or three brands of a given product, or they favor one
brand but sometimes buy others.
• Some consumers are switchers.
Segmentation, Targeting, and Positioning
Behavioral Bases: Loyalty Status
United Airlines four consumer segments based
on loyalty status.
Segmentation, Targeting, and Positioning
Multiple Segmentation Bases
•
•
How will you choose the location if you want to open an children (1-11)
apparel store?
What location is best if you want to sell upscale clothes?
Segmentation, Targeting, and Positioning
Segmentation
Criteria for effective segmentation
• Homogeneous within
• Heterogeneous between (differentiable)
• The segments are conceptually distinguishable and respond differently to
different marketing mix elements and programs.
• Substantial
• The market segments are large or profitable enough to serve.
• Operational (measurable, accessible, actionable)
• Measurable. The size, purchasing power, and profiles of the segments can
be measured.
• Accessible. The market segments can be effectively reached and served.
• Actionable. Effective programs can be designed for attracting and serving
the segments.
Segmentation, Targeting, and Positioning
Segmentation
Effective segmentation
• Methods
Uneffective segmentation
heterogeneous between
-respond differently [to target those with
microwave)
• Cluster analysis, factor analysis
• Art and opinion
Segmentation, Targeting, and Positioning
Factor Analysis
• sporty
• classic styling
• appeals to young people
• luxurious
• fun to drive
• economical on fuel
• attractive looking
• durable
• exciting
• quiet ride
• appeals to women
• reliable
• good acceleration
• comfortable
• touch of class
• safe
• expensive looking
• good resale value
• handles well
• easy to maintain
• car would like to be seen in
• good value for money
• high quality
• roomy interior
• functional instrumentation
• appeals to older people
Segmentation, Targeting, and Positioning
Factor Analysis
• Exciting and Sporty
• Comfortable and Luxurious
Exciting
Comfortable
Sporty
Appeals to older people
Good acceleration
Luxurious
Handles well
Roomy interior
Func. instrumentation
Quiet ride
Fun to drive
Safe
Attractive looking
Car to be seen in
Appeals to women
Appeals to young
Segmentation, Targeting, and Positioning
Cluster Analysis
Between group variance
Within group
variance
& between group variance #
max %
"
$ within group variance !
Segmentation, Targeting, and Positioning
Cluster Analysis
& between group variance #
max %
"
$ within group variance !
Segmentation, Targeting, and Positioning
Examples
• Nielsen/Claritas PRIZM system
• Geo-demographic segmentation
Segmentation, Targeting, and Positioning
Examples
• SBI VALS (Values and Lifestyle System)
• Psychographic-demographic
• VALS
Segmentation, Targeting, and Positioning
Customer Relationship Management
• Micro segmentation - moving toward a segment of one
• Online behavioral targeting and re-targeting
• Facebook look-alike targeting
• Creating and maintaining a relationship with an
individual customer to build lifetime value
• CRM Systems
• Harrahs/Caesars
• Amazon
Segmentation, Targeting, and Positioning
Targeting
Segmentation, Targeting, and Positioning
Targeting
• Targeting: evaluating segment attractiveness and deciding how many
and which segment(s) to serve.
• Which segment(s) to target? Criteria:
• Segment Size, Growth, Value, Stability
• Company Position with Segment
• Ease of Entry
• Ability to Reach and Serve Segment
• Competitors
• Number and strength
• Ease of entry
Segmentation, Targeting, and Positioning
Targeting
One product and multiple market segments
• (undifferentiated/mass marketing)
Multiple products and multiple market segments
• (differentiated/segmented marketing)
One product to one market segment
• (concentrated/niche marketing)
Design a specific product for each consumer
• (micromarketing)
Segmentation, Targeting, and Positioning
Undifferentiated (mass) Marketing
• Focuses on what is common in the needs of
consumers rather than on what is different (e.g.,
basic commodities)
• Helps lower product costs
Segmentation, Targeting, and Positioning
Differentiated (segmented) marketing
• Targets several different market segments and designs separate
offers for each.
• Goal is to achieve higher sales and stronger position
• More expensive than undifferentiated marketing
Segmentation, Targeting, and Positioning
Concentrated (niche) marketing
• A market-coverage strategy in which a firm goes after a large
share of one or few segments or niches.
• Let smaller companies focus their limited resources on serving
niches that may be unimportant to or overlooked by larger
competitors.
• Firms can achieve a strong market position because of its greater
knowledge of consumer needs in the niche it serves and special
利基市場
reputation it acquires.
Segmentation, Targeting, and Positioning
Concentrated (niche) marketing
• Small businesses are leveraging the Web to serve small
niches.
• Web niching is paying off handsomely for Diapers.com,
which began selling diapers online—only diapers and only
online; acquired by Amazon at $545 million in 2010.
Segmentation, Targeting, and Positioning
Micromarketing (local or individual)
• The practice of tailoring products and marketing
programs to the needs and wants of specific individuals
and local customer groups.
• local marketing
• individual marketing
Segmentation, Targeting, and Positioning
Micromarketing (local or individual)
CafePress.com sells t-shirts, bags, mugs, wall clocks,
calendars, and a myriad of other products where
customers can upload their own graphics design, logo or
text, which will be added to the product by CafePress.
As one of Top 500 online retailers, CafePress.com
attracts about 5 million unique visitors each month.
Segmentation, Targeting, and Positioning
Pros and Cons of Targeting
Pros and Cons
Pro’s
Target Market (effective) vs. Mass Market (efficient)
(1) Match customer needs better
(2) Better opportunities for growth
(3) Retain more customers
(4) Better target marketing communications
Con’s
(1) More expensive due to extra cost of product development,
production, administration, inventory, and marketing
(2) Loss of economies of scale
⾃相殘殺
(3) Suffered from cannibalization
Segmentation, Targeting, and Positioning
How to Use Segmentation and Targeting in
Your Marketing Plan?
• Step 1: Describe customer profile based on marketing research or
consumer behavior analysis.
• Step 2: Identify which groups of consumers can be potentially
targeted.
• Are specialized distribution outlets and communication media
available to reach the segment?
• Cost of reaching the segment?
• …
• Step 3: Choose you targeting strategy
• How favorably a target segment will respond to marketing
program?
• How will competitors react?
• …
Segmentation, Targeting, and Positioning
Differentiation and Positioning
Positioning
• The way the product is defined by consumers on
important attributes--the place the product occupied
in consumers’ minds relative to competing products.
• “Products are created in the factory, but brands are
created in the mind.”
Segmentation, Targeting, and Positioning
Positioning
Performance (the ultimate driving machine)
Safety
Efficient / green / earth friendly
Segmentation, Targeting, and Positioning
Choosing a Differentiation and Positioning Strategy
• Step 1: Identify a set of possible competitive advantages to
build a position
• Competitive Advantage (differentiation): an advantage over
competitors gained by offering superior customer value, either
through lower prices or by providing more benefits that justify
higher prices.
• To find points of differentiation, marketers must think through
the customer’s entire experience with the company’s product
or service (this is the most important part of your marketing
idea).
Segmentation, Targeting, and Positioning
Differentiation
Companies can differentiate along the line of:
• Product
• Services
• Channels
• People
• Image
Segmentation, Targeting, and Positioning
Differentiation
Product differentiation – Through product differentiation, brands can be
differentiated on features, performance, or style and design
By gaining the approval of
the American Heart
Association as an approach
to a healthy lifestyle,
Subway differentiates itself
as the healthy fast-food
choice.
Segmentation, Targeting, and Positioning
Product Differentiation
Two types of product differentiation:
1.
Horizontal: Goods are different but at the same price some
consumers will buy one and some will buy other, it really
depends on their preferences.
2.
Vertical: Goods are different, and all consumers would prefer
one to the other if they were sold at the same price. Goods
are of different qualities.
Segmentation, Targeting, and Positioning
Product Differentiation
Horizontal Differentiation
Segmentation, Targeting, and Positioning
Product Differentiation
Vertical Differentiation
Segmentation, Targeting, and Positioning
Differentiation
Service differentiation – A firm can also differentiate the services that
accompany the product. Some companies gain service differentiation through
speedy, convenient service.
Jimmy John’s doesn’t just offer fast food; its
gourmet sandwiches are “Freaky Fast.”
Segmentation, Targeting, and Positioning
Differentiation
Channel differentiation – Firms that practice channel differentiation gain
competitive advantage through the way they design their channel’s coverage,
expertise, and performance.
• Amazon.com sets itself apart with its smooth-functioning direct channels.
People differentiation – Companies can also gain a strong competitive
advantage through people differentiation—hiring and training better people
than their competitors do.
• Starbucks emphasizes both soft skills and hard skills of baristas to offer personalized
services to customers.
Image differentiation – A company or brand image should convey a product’s
distinctive benefits and positioning.
Segmentation, Targeting, and Positioning
Choosing a Differentiation and Positioning Strategy
Step 2: Choosing the Right Competitive Advantages
• Not every difference make a good differentiator.
• 7 criteria to decide which differences to promote:
Important: the difference delivers a highly valued benefit to target buyers
Distinctive: competitors don’t offer the difference, or company can offer
it in a more distinctive way.
Superior: the difference is superior to other ways that customers might
obtain the same benefit.
Communicable: the difference is communicable and visible to buyers
Preemptive: competitors can’t easily copy the difference.
Affordable: Buyers can afford to pay for the difference.
Profitable: the company can introduce the difference profitably.
Segmentation, Targeting, and Positioning
Choosing a Differentiation and Positioning Strategy
• Walmart Everyday Low Price (EDLP)
•
•
•
•
•
•
•
Important
Distinctive
Superior
Communicable
Preemptive
Affordable
Profitable
Segmentation, Targeting, and Positioning
Choosing a Differentiation and Positioning Strategy
• Step 3: Selecting an Overall Positioning Strategy
Value proposition is the full mix of benefits upon which a brand
is positioned
Positioning Statement: A statement that summarizes company
or brand positioning.
• It takes this form: To (target segment and need) our (brand) is
(concept) that (point-of-difference).
Segmentation, Targeting, and Positioning
Positioning Statement
Customer Segment
For ______________________,
your product/service
Two or Three
Is ______________________________
Most Important Benefits (Reasons to Buy)
___________________________________
Primary Competition ,
Because compared to ______________________
Key Points of Differentiation
_______________________________
Segmentation, Targeting, and Positioning
⽂字
Choosing a Differentiation and Positioning Strategy
• Step 4: Communicating and Delivering the Chosen
Position
• Choosing the positioning is often easier than implementing the
position.
• Establishing a position or changing one usually takes a long
time.
• Maintaining the position requires consistent performance and
communication
Segmentation, Targeting, and Positioning
Putting Everything Together
The Marketing Strategy Process
Analyze
Define the market
(Consumers, Company,
Competitors)
Segment (A, B, C, D)
Target (B, D)
Position
Implement
Marketing mix (4 P’s)
Price
Promotion
Product
Place
Segmentation, Targeting, and Positioning
Unilever’s example
• In 2001, Unilever realized that they had a huge issue
• They had multiple brands of ice cream. However, their
sales of ice-cream for out of home consumption is
declining.
• They want to target young consumers.
Segmentation, Targeting, and Positioning
Segmentation, Targeting, and Positioning
Defining and Implementing a Positioning Strategy
5 C’s
analysis
Strategic focus &
positioning
Segmentation, Targeting, and Positioning
Brand Architecture (200 à 50 brands)
Powerbrand
Housebrand-linked
driver brands
Housebrand-linked
local champions
etc.
Stand-alone
leading brands
Segmentation, Targeting, and Positioning
Defining and Implementing a Positioning Strategy
Internal articulation &
implementation
5 C’s
analysis
Strategic focus &
positioning
Segmentation, Targeting, and Positioning
Values & personality
•
•
•
•
•
•
•
Energy
Urban
Spontaneous
Youth culture
Fun
Sociable
Caring
Segmentation, Targeting, and Positioning
Defining and Implementing a Positioning Strategy
External support &
leverage
Internal articulation &
implementation
5 C’s
analysis
Strategic focus &
positioning
Segmentation, Targeting, and Positioning
External Communications
Segmentation, Targeting, and Positioning
Events
New Experiences
Defining and Implementing a Positioning Strategy
External support &
leverage
Internal articulation &
implementation
5 C’s
analysis
Strategic focus &
positioning
Segmentation, Targeting, and Positioning
The Marketing Plan
- Integrating the 5 C’s and the 4 P’s Current marketing
situation (5 C’s)
Background data on sales, costs, profits, market,
competitors, distribution, and environment.
Opportunity and
issue analysis (5 C’s)
Identifies the main opportunities/threats,
strengths/weaknesses.
Objectives
Defines plan’s financial and marketing goals in terms of
sales volume, market share, and profit.
Marketing strategy
(4 P’s)
Presents the broad marketing approach that will be
used to achieve the plan’s objectives.
Action programs
(4 P’s)
Presents the special marketing programs designed to
achieve the business objectives.
Project profit-andloss statement
Forecasts the plan’s expected financial outcomes.
Adapted From: Philip Kotler, Marketing Management,
Segmentation, Targeting, and Positioning
Summary
• Market Segmentation
• Different bases for segmenting the market
• Market Targeting
• Factors to consider when evaluating different
market segments
• Narrow or broad targeting
• Differentiation and Positioning
• 4 steps of differentiation and positioning task
Segmentation, Targeting, and Positioning