Market Segmentation and Positioning
CHAPTER 8
Market Segmentation
 Dividing the total heterogeneous market for a
good or product into smaller groups which are
more homogeneous.
Steps in Segmentation & Targeting
1.
Break
market
down
2.
Group
into
segments
3.
Choose
target
market
TARGET MARKET
Segmentation works because,….
 Not all buyers are alike
 Subgroups may be identified
 Subgroups are smaller and more
homogeneous
 Easier to satisfy smaller groups
 www.fordvehicles.com
Effective Segmentation


To be useful, market segments must be:

Measurable: size, purchasing power, and profile

Accessible: can be reached and served/responsive

Substantial: large enough to profitably serve

Differentiable: respond differently to a marketing mix

Actionable: effective programs can be designed
Segments should be evaluated for:

Size

Growth characteristics

Structural attractiveness

Compatibility with company objectives and resources
Discussion Questions
Put yourselves into small groups and answer the
following assigned questions on page 218:
 Question 2 and all parts of 4
Market Segmentation Variables
 Geographic: dividing a
market into different
geographical units, such
as nations, states,
regions, counties, cities,
or neighbourhoods
 Demographic: dividing
the market into groups
based on demographic
variables such as age,
sex, family size, family
life cycle, religion, race,
and nationality
 Socioeconomic: identifying
differences in income,
education, occupation and
social class
 Psychographic: dividing a
market into different groups
based on activities, interests,
lifestyle, opinions, values or
personality characteristics
 Behavioural: dividing a market
into groups based on consumer
loyalty (to brand or store),
usage, benefits sought/
expected, response to a product
and price
Identifying Market Differences
 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.
Four strategies for target marketing
Undifferentiated Marketing:
1.

When everyone is a customer. Firm decides to ignore market
segment differences and go after the whole market with one
offer.
Concentrated Marketing:
2.

Zeroing in on a single target. A firm goes after a large share of
one market.
Differentiated Marketing:
3.

Different Buyers, Different Strategies. A firm decides to target
several market segments and designs separate offers for each.
http://www.tide.com/en_CA/index.jsp
Custom/Individual Marketing:
4.

Tailoring marketing offers to the needs and preferences of
individual customers
Choosing a Market Coverage Strategy
Depends on:

Company resources

Degree of product variability

Product life cycle stage

Market viability

Competitors’ marketing strategies
What’s Happening?
 Mid-term Exams
 Term Projects!
From Jill Day,
 http://www.youtube.com/watch?v=3iuG1OpnHP8
Brendan O’Donovan,
 http://www.youtube.com/watch?v=l7NgLArJidY
Market Positioning
 Market positioning:
 Arranging for a product to
occupy a clear, distinctive,
and desirable place relative
to competing products in
the minds of target
consumers.
 Product position: the way
the product is defined by
consumers on important
attributes, relative to
competing products
 The “quicker-pickerupper?”
 The “uncola?”
 “Great taste, less filling?”
Positioning Maps for Tea
(Exhibit 8-12, PAGE 215)