part two: making sense of markets
CHAPTER 4
MARKET SEGMENTATION, TARGETING
AND POSITIONING
an opening challenge
You are the marketing director of a lossmaking brewery. You need to develop new
products to revitalise the business but you do
not have the resources to launch a full range.
How will you choose what type of beer to sell
and to whom?
agenda
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market selection
market segmentation
targeting strategies
positioning
market attractiveness
• market opportunity
• competitive advantage
• the objectives of the organisation
segmentation, targeting and
positioning
market segmentation
targeting
positioning
market segmentation and
targeting: why do it?
• many markets are demand-driven
• consumers and customers are more
demanding
• few mass markets remain
– markets are fragmenting
what is market segmentation?
‘the process of dividing a total market into
subgroups (segments) such that each
segment consists of buyers and users who
share similar characteristics but are
different from those in the other segments’
(Masterson and Pickton, 2014)
criteria for determining good
market segments
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measurable
homogeneous
heterogeneous
substantial
accessible
operational
consumer segmentation bases
• demographic
– socio-economic or social grading
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geographic
geo-demographic
psychographic
mediagraphic
behavioural
life-stage segments (BRMB-TGI)
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fledglings
flown the nest
nest builders
mid-life dependents
unconstrained couples
playschool parents
primary school parents
• secondary school parents
• hotel parents
• senior sole decision
makers
• empty nesters
• non-standard families
• unclassified
examples of behavioural
segmentation bases
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purchase occasion
benefits sought
usage rate
user status
readiness stage
attitude to product
involvement
adopter type
loyalty status
using multiple segmentation
variables
AQ – re-set figure type
organisational segmentation
bases
• macro-segmentation
– geographic
– type of organisation
– industry grouping/business sector
– customer size
organisational segmentation
bases
• micro-segmentation
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user status
trade category
benefits sought
loyalty status
readiness stage
adopter type
purchasing practices
buy class
nested approach to B2B
market segmentation
AQ – re-set figure type
target marketing (targeting)
‘the selection of one or more market
segments towards which marketing
efforts can be directed’ (Masterson and
Pickton, 2014, glossary)
targeting strategies
AQ – re-set figure type
evaluating a segment for
targeting
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sufficient current and potential sales/profits?
potential for sufficient future growth?
not over-competitive?
no excessive barriers to entry or exit?
unsatisfied needs that the company can serve
well?
positioning
‘the place a brand is perceived to occupy in
the minds of the target market relative to
other competing brands’ (Masterson and
Pickton, 2010: 148)
multi-attribute mapping
AQ – re-set figure type
perceptual mapping
AQ – re-set figure type
positioning strategies
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attributes/product features
price/quality
usage occasions
benefits or needs
user
competitive
– against another brand
– a different product class
re-positioning
e.g. McDonalds have been trying to move to a healthier
position in people’s perceptions
(photo courtesy of Dave Pickton)
five-stage process
identify the total market
identify market segments
select target market segment(s)
establish competitors’ positions
establish own position
summary
• markets are people, not products
• products should be targeted at specific
market groups (segments)
– use multi-variable segmentation
– opportunities for differentiation
• develop clear positioning
reference
Masterson, R. and Pickton, D. (2014) Marketing:
An Introduction, 3rd edn. London: SAGE.