Segmentation, Targeting and
Positioning
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Market Segmentation
Market segmentation is the process that
companies use to divide large, heterogeneous
markets into small markets that can be reached
more efficiently and effectively with products and
services that match their unique needs
Market Segmentation
Segmenting Consumer Markets
Market Segmentation
Segmenting Consumer Markets
Geographic segmentation divides the market into
different geographical units such as nations,
regions, states, counties, or cities
Market Segmentation
Segmenting Consumer Markets
Demographic segmentation divides the market
into groups based on variables such as age,
gender, family size, family life cycle, income,
occupation, education, religion, race, generation,
and nationality
Market Segmentation
Age and life-cycle stage segmentation is the
process of offering different products or using
different marketing approaches for different age
and life-cycle groups
Gender segmentation divides the market based
on sex (male or female)
Market Segmentation
Segmenting Consumer Markets
Income segmentation divides the market into
affluent or low-income consumers
Psychographic segmentation divides buyers into
different groups based on social class, lifestyle, or
personality traits
Market Segmentation
Segmenting Consumer Markets
Behavioral segmentation divides buyers
into groups based on their knowledge,
attitudes, uses, or responses to a product
Occasions
Benefits sought
User status
Usage rate
Loyalty status
Market Segmentation
Using Multiple Segmentation Bases
Multiple segmentation is used to identify smaller,
better-defined target groups
Geodemographic segmentation is an example of
multivariable segmentation that divides groups
into consumer lifestyle patterns
Market Segmentation
Requirements for Effective Segmentation
To be useful, market segments must be:
Market Targeting
Selecting Target Market Segments
Target market consists of a set of buyers who
share common needs or characteristics that the
company decides to serve
Market Targeting
Evaluating Market Segments
Segment size and growth: Sales,
Growth Rates & Expected Profitability
Segment structural attractiveness:
Competitors, Substitute Products, Power
of Buyers, Power of Suppliers.
Company objectives and
resources
Market Targeting
Target Marketing Strategies
Undifferentiated marketing targets the whole
market with one offer
Mass marketing
Focuses on common needs rather
than what’s different
Market Targeting
Target Marketing Strategies
Differentiated marketing targets several different
market segments and designs separate offers for
each
Goal is to achieve higher sales and stronger
position
More expensive than undifferentiated marketing
Market Targeting
Target Market Strategies
Concentrated marketing targets a small share of
a large market
Limited company resources
Knowledge of the market
More effective and efficient
Marketing Targeting
Target Market Strategies
Micromarketing is the practice of tailoring products
and marketing programs to suit the tastes of
specific individuals and locations
Local marketing
Individual marketing
Market Targeting
Target Market Strategies
Local marketing involves tailoring brands and
promotion to the needs and wants of local
customer groups
Cities
Neighborhoods
Stores
Market Targeting
Target Market Strategies
Individual marketing involves tailoring products
and marketing programs to the needs and
preferences of individual customers
Also known as:
One-to-one marketing
Mass customization
Markets-of-one marketing
Market Targeting
Choosing a Targeting Strategy
Depends on:
Company resources
Product variability
Product life-cycle stage
Market variability
Competitor’s marketing strategies
Introduction: Positioning
Creating a unique and distinctive image for a
brand relative to the competition
Brand should be perceived as different from
competitors by consumers
Brand Positioning
1. Points-of-difference –uniquebrand values
Desirable
Deliverable
2. Points-of-parity–sharedbrand values
Necessary
Competitive
Factors Affecting Positioning
1. Product
2. Company
3. Competition
4. Consumers
Positioning Techniques
1. Positioning by specific product features.
2. Positioning by distinct benefits to users.
3. Positioning by specific usage
4. Positioning by Price/ Quality
5. Positioning by lifestyle of users
6. Positioning by CSR
STEPS IN POSITIONING
Identify competitors
Determine most important attributes consumers use in
choosing a brand
Determine consumers 'perceptions of competitors
Determine perceptions of your brand
What is the ideal brand for your market segments?
Assess best positioning strategy
Track image of brand over time
