Segmentation, Targeting and
Positioning

Divide a market into separate groups
Targeting a group of customers
who share a similar set of
needs and wants
Reasons of Segmentation

Identifies opportunities and needs.

Allows firm to focus on specific needs.

Improves marketing mix for each segment.

Allows small firm to exist.
Segmentation Strategy
1.
2.
3.
4.
5.
6.
7.
Determine Demand Patterns
Establish Possible Bases of
Segmentation
Identify Potential Market Segments
Choose a Target Market Approach
Select the Target Market(s)
Position the Firm’s Offering in
Relation to the Competition
Develop the Appropriate Marketing
Mix(es)
Analyze
Consumer
Demand
Target the
Market
Develop
the
Marketing
Strategy
Basic Market Preference Patterns
Segmentation Criteria
Measurable
Accessible
Substantial
Differential
Actionable
Size, purchasing power, profiles
of segments can be measured.
Segments must be effectively
reached and served.
Segments must be large or
profitable enough to serve.
Segments must respond
differently to different
marketing mix elements &
actions.
Must be able to attract and
serve the segments.
Segmentation Variables for Consumer Markets
FIGURE 7.3
Demographic Variables

Population characteristics such as age,
gender, race, ethnicity, income,
education
Geographic Variables


Customer product needs are influenced
by climate, city size, population density,
and urban/rural areas
Market Density

the number of potential customers within a
unit of land area
Psychographic Variables

Personality characteristics


Motives


Marketers appeal to positive/favorable personal
characteristics to influence the purchase decision.
Marketers use individuals’ differing purchase
motives to segment a product market.
Lifestyles

Marketers segment markets according to how
individuals choose to spend their time in various
activities, their income, their interest and opinions,
and their education
Behavioristic Variables

Benefit segmentation


The division of a market according to
benefits that customers want from the
product
Individuals purchase and use products that
provide them with benefits that meet their
needs
Market Targeting

Segment Size and Growth


Segment Structural Attractiveness


Analyze sales, growth rates and expected profitability.
Consider effects of: Competitors, Availability of Substitute
Products and, the Power of Buyers & Suppliers.
Company Objectives and Resources


Company skills & resources relative to the segment(s).
Look for Competitive Advantages
Patterns of Target Market Selection
Patterns of Target Market Selection
Patterns of Target Market Selection
Targeting Strategies
Company
Marketing
Mix
Market
A. Undifferentiated Marketing
Company
Marketing Mix 1
Company
Marketing Mix 2
Company
Marketing Mix 3
Segment 1
Segment 2
Segment 3
B. Differentiated Marketing
Company
Marketing
Mix
Segment 1
Segment 2
Segment 3
C. Concentrated Marketing
Factors Affecting the Strategy





Company Resources
Product Variability
Product’s Stage in the Product Life Cycle
Market Variability
Competitors’ Marketing Strategies
Positioning
The place the product occupies in
consumers’ minds relative to competing
products
Marketers must
Plan positions to give products
the greatest advantage
 Develop marketing mixes to
create planned positions

Positioning Strategies
Product
Class
Away from
Competitors
Product
Attributes
Benefits
Offered
G
H
C
A
Against a
Competitor
D
E
B
F
Users
Usage
Occasions
Steps to Choosing Positioning
Strategy
1.
2.
3.
Identifying a set of possible
competitive advantages: Competitive
Differentiation
Selecting the right competitive
advantage
Effectively communicating and
delivering the chosen position to the
market