Chapter Seven
Segmentation, Targeting and
Positioning:
Building the Right Relationships
with the Right Customers
with Duane Weaver
7-1
Segmentation/Positioning
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Segment markets.
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Identify bases for segmentation.
Develop segmentation profiles.
Target segment(s).
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Measure of segment attractiveness.
Select the target segment(s).
Position for target segment(s).
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7-2
Develop positioning for each segment.
Develop appropriate marketing mix.
Segmentation Variables
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Geographic.
• Area, population density, climate, etc.
•
Demographic.
• Age, sex, life cycle, income, job, etc.
•
Psychographic.
• Lifestyle, personality, etc. Dividing a market into different
groups based on:
» Social class.
» Lifestyle.
» Personality characteristics.
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Behavioural.
• Benefits sought, status, usage rate, loyalty, attitudes, etc.
7-3
Market Segmentation (How To)
• Best to use multiple approaches in order
to identify smaller, better-defined target
groups.
• Start with a single base and then expand
to other bases.
7-4
Segmenting Business Markets
• Consumer and business markets use many
of the same variables for segmentation.
• Business marketers can also use:
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7-5
Operating characteristics.
Purchasing approaches.
Situational factors.
Personal characteristics.
Evaluating Market Segments
• Segment size and growth.
– Analyze current segment sales, growth rates and
expected profitability.
• Segment structural attractiveness.
– Consider effects of: competitors, existence of
substitute products, the power of buyers/suppliers.
• Company objectives and resources.
– Examine company skills and resources needed to
succeed in that segment.
– Offer superior value/gain competitive advantage.
7-6
Segment Success Criteria
• Measurable – Ability to measure
numerically.
• Accessible – Ability to reach segment.
• Substantial – Ability to support the
business.
• Differentiable – Ability to find unique
position in segment.
• Actionable – Ability to pursue and
capture the segment.
7-7
Levels of Segmentation
• Mass marketing.
– No segments and single marketing mix.
• Differentiated marketing.
– Large segments with specific marketing mixes.
• Niche marketing.
– Small segments with specialized marketing
mixes.
• Micro-marketing.
– Customized marketing to individuals.
7-8
Undifferentiated (Mass Marketing)
• Focus is on common (not different)
needs of consumers.
• Product and marketing program are
geared to the largest number of buyers.
• Uses mass advertising and distribution.
• Henry Ford’s Model T is an excellent
example of undifferentiated or mass
marketing.
7-9
Differentiated Marketing
• Firm targets several market segments
and designs separate offers for each.
• The goal is to have higher sales and a
stronger position with each market
segment.
• This approach increases the costs of
doing business.
• General Motors claims to make a car for
every segment.
7-10
Niche Marketing
• The focus is acquiring a large share of
one or a few segments of niches.
• Generally, there are fewer competitors.
• The Internet is ideal for targeting small
niche markets.
• There is some risk in focusing on only
one market.
7-11
Micromarketing
• Tailoring products and marketing
programs to suit the tastes of specific
individuals and locations.
– Local Marketing: Tailoring brands and promotions
to the needs and wants of local customer groups—
cities, neighbourhoods, specific stores.
– Individual Marketing: Tailoring products and
marketing programs to the needs and preferences
of individual customers.
7-12
Mass Customization
• The process of creating customer-unique
value by designing products and services
tailor-made to individual needs, on a large
scale.
• Having your next car or sneakers built to
order? (life insurance e.g.)
7-13
Successful Positioning
• Product position.
– How a product is viewed by consumers
relative to competing products.
• Three positioning steps.
1. Identify competitive advantages on which
to build a differentiated position.
2. Choose the right competitive
differentiation.
3. Select an overall positioning strategy.
7-14
Gaining Competitive Advantage
• Key to winning target customers is to
understand their needs better than
competitors do and to deliver more value.
• Competitive advantage – extent to which a
company can position itself as providing
superior value.
7-15
Identifying Competitive
Advantage
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Product differentiation.
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Consistency, durability, reliability, reparability.
Services differentiation.
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Speed, convenience, careful delivery.
Image differentiation.
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Convey benefits and positioning.
People differentiation.
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Hiring, training better people than the competition.
Get into Groups of three and select a product you
think has market dominance. Discuss the
competitive advantage that company holds in the
market place. What is it? (be prepared to share with
the class).
7-16
Successful Differentiation
• Important – of value to consumers.
• Distinctive – obvious and clear.
• Superior – better value than the
competitors.
• Communicable – explainable.
• Pre-emptive – defendable and unique.
• Affordable – delivers value for cost.
• Profitable – company can make
money.
7-17
Positioning Errors
• Under-positioning.
– Failing to really position the company at all.
• Over-positioning.
– Giving buyers too narrow a picture of the
company.
• Confused positioning.
– Leaving buyers with a confused image of a
company.
7-18
Value Propositions
Price
Benefits
More
7-19
More
The same
Less
More
for
more
More
for the
same
More
for
less
The same
The same
for
less
Less
Less for
much
less
THANKS!
Does Market Segmentation and
Customer Positioning enable
marketers to hit the right
buttons;
providing differentiated value at
a profit???
IT’S ALL ABOUT THE LEVERAGE…BABY!
7-21