Marketing
Marketing Management for competitive advantage
Market
Segmentation, Targeting & Positioning
Chapter 8
Levels of market segmentation
Segmentation bases
Market coverage strategies
Developing and Communicating a
Positioning Strategy
Perceptual Map
Competitive Positioning
NTT DoCoMo
STP-1
Zeng Rong®
Marketing Management for competitive advantage
Steps in Target Marketing
Market Segmentation
(Fig. 7.1)
1. Identify bases for
segmenting the market
2. Develop segment profiles
Market Targeting
3. Develop measure of
segment attractiveness
4. Select target segments
Market positioning
5. Develop positioning for
target segments
6. Develop a marketing
mix for each segment
Zeng Rong®
STP-2
Marketing Management for competitive advantage
Definition
Market Segmentation:
Dividing a market into distinct groups with
distinct needs, characteristics, or behavior
who might require separate products or
marketing mixes.
Homogeneous within & heterogeneous
between
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STP-3
1
Marketing
Marketing Management for competitive advantage
Segmentation Bases
Bases for Segmenting Consumer Markets
geographic
demographic
Psychographic
⌧Lifestyle, social class, and personality-based
segmentation
behavioral
⌧purchase occasions, benefits sought, user status,
usage rate, loyalty status, …
Using Multiple Segmentation Bases
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STP-4
Marketing Management for competitive advantage
VALS Framework
Zeng Rong®
STP-5
Marketing Management for competitive advantage
The Isuzu Rodeo is a
sport-utility vehicle
that is conceived with
an eye towards quality,
practicality and the
ability to handle
diverse driving
condition. As a highly
adaptive vehicle, its
versatile design allows
it to thrive in any
environment.
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STP-6
2
Marketing
Marketing Management for competitive advantage
Segmentation Bases
Requirements for Effective Segmentation
Homogeneous within & heterogeneous between
Measurable
⌧Size, purchasing power, and profile of segment
Substantial
⌧Large and profitable enough to serve
Accessible
⌧Can be reached and served
Actionable
⌧Effective programs can be developed
Differentiable
⌧Respond differently
STP-7
Zeng Rong®
Marketing Management for competitive advantage
Bases for Segmenting Business Markets
macro-segmenting
Demographic segmentation
⌧Industry, company size, location
Operating variables
⌧Industry, size, location, financial position, …
micro-segmenting
purchasing behavior (freq., quantity, type,…), benefits
sought
Situational factors
⌧Urgency, specific application, size of order
Personal characteristics
⌧Buyer-seller similarity, attitudes toward risk, loyalty
STP-8
Zeng Rong®
Marketing Management for competitive advantage
Steps in Target Marketing
Market Segmentation
1. Identify bases for
segmenting the market
2. Develop segment profiles
Market Targeting
3. Develop measure of
segment attractiveness
4. Select target segments
Who are they?
What do they want and why?
When do they buy and use it?
Where do they buy and use it?
How do they buy and use it?
Segment size?
…
Market positioning
5. Develop positioning for
target segments
6. Develop a marketing
mix for each segment
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STP-9
3
Marketing
Marketing Management for competitive advantage
Target Marketing
Target Market
Consists of a set of buyers who share
common needs or characteristics that the
company decides to serve
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STP-10
Marketing Management for competitive advantage
Target Marketing
Evaluating Market Segments
Segment size and growth
Segment structural attractiveness
⌧ Level of competition
⌧ Substitute products
⌧ Power of buyers
⌧ Powerful suppliers
Company objectives and resources
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STP-11
Marketing Management for competitive advantage
Target Marketing
Selecting Target Market Segments
Undifferentiated (mass) marketing
Differentiated (segmented) marketing
Concentrated (niche) marketing
⌧Guerrillas against gorillas.
Micromarketing
⌧Local marketing
⌧Individual marketing
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4
Marketing
Marketing Management for competitive advantage
Possible Market Coverage Strategies
Company
Company
Marketing
Marketing
Mix
Mix
Market
Market
A. Undifferentiated Marketing
Company
Company
Marketing
MarketingMix
Mix11
Company
Company
Marketing
Mix
Marketing Mix22
Company
Company
Marketing
MarketingMix
Mix33
Segment
Segment11
Segment
Segment22
Segment
Segment33
B. Differentiated Marketing
Segment
Segment11
Company
Company
Marketing
Marketing
Mix
Mix
Segment
Segment22
Segment
Segment33
C. Concentrated Marketing
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STP-13
Marketing Management for competitive advantage
Choosing a Market Coverage Strategy
Company Resources
Product Variability
Product’s Stage in the Life Cycle
Market Variability
Competitor’s Marketing Strategies
segment by segment invasion
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STP-14
Marketing Management for competitive advantage
Segment-by-Segment Invasion Plan
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STP-15
5
Marketing
Marketing Management for competitive advantage
Positioning
The place the product occupies in consumers’ minds
relative to competing products.
Typically defined by consumers on the basis of
important attributes.
Involves implanting the brand’s unique benefits and
differentiation in the customer’s mind.
Positioning maps that plot perceptions of brands are
commonly used.
高质量
A
F
低价格
E
D
高价格
C
低质量
B
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STP-16
Marketing Management for competitive advantage
Perceptual Map
STP-17
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Marketing Management for competitive advantage
Positioning Strategy
Topics
Differentiation can be based on
Identifying possible
competitive advantages
Choosing the right
competitive advantage
Choosing a positioning
strategy
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Products
Services
Channels
People
Image
STP-18
6
Marketing
Marketing Management for competitive advantage
Examples of Competitive Advantage
(1)
(2)
(3)
(4)
(5)
Company
Standing
Competitor
Standing
Importance of
Improving
Standing
(H-M-L)*
Affordability
and Speed
(H-M-L)
Technology
8
8
L
L
Cost
6
8
H
M
Quality
8
6
L
L
Service
4
3
H
H
Competitive
Advantage
H=high, M=medium, L=low
STP-19
Zeng Rong®
Marketing Management for competitive advantage
Positioning Strategy
Topics
Identifying possible
competitive advantages
Choosing the right
competitive advantage
Choosing a positioning
strategy
Competitive
Positioning
How many differences to promote?
Unique selling proposition
Several benefits
Which differences to promote?
Criteria include:
Important
Distinctive
Superior
Communicable
Preemptive
Affordable
Profitable
STP-20
Zeng Rong®
Marketing Management for competitive advantage
Positioning Strategy
Topics
Identifying possible
competitive advantages
Choosing the right
competitive advantage
Choosing a positioning
strategy
Value propositions represent the
full positioning of the brand
Possible value propositions:
More for More
More for the Same
More for Less
The Same for Less
Less for Much Less
Zengcompanies
Rong®
Goal 4: Realize how
position their products
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STP-21
7
Marketing
Marketing Management for competitive advantage
Competitive Positioning
Market Leader
appeal to the leader (original) position
expand the category
continuous innovation
blockade the competition
⌧ price, fighting brand, ...
Non-leader
Major positioning errors
STP-22
Zeng Rong®
Marketing Management for competitive advantage
Developing a Positioning Statement
Positioning statements summarize the
company or brand positioning
EXAMPLE: To (target segment and need)
our (brand) is (concept) that (point-ofdifference)
Communicating the Positioning
Companies must be certain to DELIVER their
value propositions.
Positions must be monitored and adapted
over time.
Zengcompanies
Rong®
Goal 4: Realize how
position their products
STP-23
Marketing Management for competitive advantage
Examples of Value Propositions
Company
Target
and Product Customers
Benefits
Price
Value Proposition
Perdue
(chicken)
Qualityconscious
consumers of
chicken
Tenderness
10%
premium
More tender
golden chicken at
a moderate
premium price
Volvo
(station
wagon)
Safetyconscious
“upscale”
families
Durability
and safety
20%
premium
The safest, most
durable wagon in
which your family
can ride
Domino’s
(pizza)
Convenienceminded pizza
lovers
Delivery
speed and
good quality
15%
premium
A good hot pizza,
delivered to your
door within 30
minutes of
ordering, at a
moderate price
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STP-24
8