Segmentation, Targeting and Positioning:
Building the Right Relationships
with the Right Customers
Steps in Market Segmentation,
Targeting, and Positioning
• Market segmentation: dividing market into distinct groups
which will require separate marketing mixes
• Target marketing: choosing which group(s) to appeal to
• Market positioning: creating a clear, distinctive position in
the consumer’s mind relative to competition
Consumer Market Segmentation
• Geographic:
– Regions
– Size/density
– Climate
• Demographic:
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Age/generation
Gender
Family size/life-cycle
Income
Occupation
Religion
Ethnic origin
• Psychographic:
– Social class
– Lifestyle
– Personality
• Behavioral:
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Occasions
Benefits
User status
Usage rate
Loyalty status
Readiness state
Attitude toward product
Business Markets Segmentation
• Demographic:
– Industry
– Company size
– Location
• Operating variables:
– Technology
– User/non-user status
– Customer capabilities
• Situational factors:
– Urgency
– Specific application
– Size of order
• Purchasing
approaches:
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Purchasing organization
Power structure
Existing relationships
General policies
Purchasing criteria
• Personal
characteristics:
– Buyer-seller similarity
– Attitude towards risk
– Loyalty
Segmenting International Markets
• International markets can be segmented by:
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Geographic location
Economic factors
Political and legal factors
Cultural factors
• Intermarket segmentation:
– Forming segments of
consumers who have similar
needs, even though they live
in different countries
Requirements for Effective Segmentation
• To be useful, market segments must be:
– Measurable:
• Size, purchasing power, and profiles can be measured
– Accessible:
• Segments can be reached
– Substantial:
• Large enough to be
profitable
– Actionable:
• Programs can be
developed to attract and
serve the segments
Target Marketing Strategies
• Three factors used to evaluate segments:
– Segment size and growth
– Structural attractiveness
• Competition, substitute products, power of
buyers/suppliers
– Company objectives and resources
Choosing a Target Marketing Strategy
• Factors to be considered:
– Company resources
– Product variability
– Product’s life-cycle
stage
– Market variability
– Competitor’s marketing
strategies
Positioning for Competitive Advantage
• Product position: the way the product is defined by
consumers on important attributes, relative to competing
products
• Competitive advantage: an advantage gained over
competitors by offering (and delivering) greater value
• Sources of differentiation:
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Product
Service
Marketing channels
People
Image
Which Differences to Promote?
• Unique selling proposition (USP): aggressively
promoting one benefit to the target audience
• Three major
positioning errors:
– Under-positioning
– Over-positioning
– Confused positioning
• Differences should be:
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Important
Distinctive
Superior
Communicable
Pre-emptive
Affordable
Profitable
Possible Value Propositions
• Value proposition:
– Full positioning of a
brand
– Mix of benefits used
for positioning
Sliced Bread
and other
marketing delights…
Seth Gordin
Marketing Expert, book author
and Entrepreneur
Former Vice President
of Marketing
at Yahoo!
Class Assignment
Select one of below brands and do research to learn more about the brand.
Then answer the below questions with a short group presentation.
1)Give a brief description of your product and define the target market and
segment it serves
2)At what stage in its life cycle is this product? What are your reasons for
believing it is at this point?
3)How do the product’s packaging and labeling help boost its consumer appeal?
4)How is the product promoted?
5)Is this product sold in international markets? If so, does the company use a
standardized or customized strategy?
6)How is the product priced in relation to competing products?
Nescafe coffee
Samsung “Galaxy”
tablet computers
Levi’s jeans
Play Station 2
Metersbonwe clothing
Coca-Cola drinks
L’Oreal shampoo and
hair products
Snickers chocolate
Apple ipod
Haier refrigerators
Lenovo laptops
KFC Restaurants
BYD Automobiles
Casio Watches
Huawei mobile telephones