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Segmentation, Targeting, and Positioning Building the Right Relationships with the Right Customers

Segmentation, Targeting, and Positioning Building the Right Relationships with the Right Customers. Chapter 7. Learning Goals. Learn the three steps of target marketing, market segmentation, target marketing, and market positioning

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Segmentation, Targeting, and Positioning Building the Right Relationships with the Right Customers

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  1. Segmentation, Targeting, and PositioningBuilding the Right Relationships with the Right Customers Chapter 7

  2. Learning Goals • Learn the three steps of target marketing, market segmentation, target marketing, and market positioning • Understand the major bases for segmenting consumer and business marketing strategy • Know how companies identify attractive market segments and choose target marketing strategy • Realize how companies position their products for maximum competitive advantage in the marketplace

  3. Sells multiple brands within the same product category for a variety of products Brands feature a different mix of benefits and appeal to different segments Has also identified different niches within certain segments Product modifications are useful: Tide offers seven different product formulations to serve different niches’ needs Case StudyProcter & Gamble

  4. Steps in market segmentation, targeting and positioning • Market Segmentation • Identify bases for segmenting the market • Develop segment profiles • Target Marketing • Develop measure of segment attractiveness • Select target segments • Market Positioning • Develop positioning for target segments • Develop a marketing mix for each segment Goal 1: Learn the three steps of target marketing

  5. Definition • Market Segmentation: • Dividing a market into distinct groups with distinct needs, characteristics, or behavior who might require separate products or marketing mixes. Goal 2: Understand the major bases for segmentation

  6. Segmenting Consumer Markets • Geographical segmentation • Demographic segmentation • Most popular segmentation • Psychographic segmentation • Lifestyle, social class, and personality-based segmentation • Behavioral segmentation Goal 2: Understand the major bases for segmentation

  7. World region or country U.S. region State City Neighborhood City or metro size Density Climate Geographic Segmentation Variables Goal 2: Understand the major bases for segmentation

  8. Age Gender Family size Family life cycle Income Occupation Education Religion Race Generation Nationality Demographic Segmentation Variables Goal 2: Understand the major bases for segmentation

  9. Occasions Benefits User Status Attitude Toward the Product User Rates Loyalty Status Readiness Stage Behavioral SegmentationVariables Goal 2: Understand the major bases for segmentation

  10. Segmenting Business Markets • Demographic segmentation • Industry, company size, location • Operating variables • Technology, usage status, customer capabilities • Purchasing approaches • Situational factors • Urgency, specific application, size of order • Personal characteristics • Buyer-seller similarity, attitudes toward risk, loyalty Goal 2: Understand the major bases for segmentation

  11. Segmenting International Markets • Geographic segmentation • Location or region • Economic factors • Population income or level of economic development • Political and legal factors • Type / stability of government, monetary regulations, amount of bureaucracy, etc. • Cultural factors • Language, religion, values, attitudes, customs, behavioral patterns Goal 2: Understand the major bases for segmentation

  12. Requirements for Effective Segmentation • Measurable • Size, purchasing power, and profile of segment • Accessible • Can be reached and served • Substantial • Large and profitable enough to serve • Differentiable • Respond differently • Actionable • Effective programs can be developed Goal 2: Understand the major bases for segmentation

  13. Target Marketing • Target Market • Consists of a set of buyers who share common needs or characteristics that the company decides to serve Goal 3: Know how companies identify and target attractive segments

  14. 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 Goal 3: Know how companies identify and target attractive segments

  15. Target Marketing • Selecting Target Market Segments • Undifferentiated (mass) marketing • Differentiated (segmented) marketing • Concentrated (niche) marketing • Micromarketing (local or individual) Goal 3: Know how companies identify and target attractive segments

  16. Choosing a Target Marketing Strategy • Considerations include: • Company resources • The degree of product variability • Product’s life-cycle stage • Market variability • Competitors’ marketing strategies Goal 3: Know how companies identify and target attractive segments

  17. Target Marketing • Socially Responsible Targeting • Some segments, especially children, are at special risk • Many potential abuses on the Internet, including fraud Internet shoppers • Controversy occurs when the methods used are questionable Goal 3: Know how companies identify and target attractive segments

  18. Positioning • 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. Goal 4: Realize how companies position their products

  19. Identifying possible competitive advantages Choosing the right competitive advantage Choosing a positioning strategy Differentiation can be based on Products Services Channels People Image Choosing a Positioning Strategy Topics Goal 4: Realize how companies position their products

  20. How many differences to promote? Unique selling proposition Several benefits Which differences to promote? Criteria include: Important Distinctive Superior Communicable Preemptive Affordable Profitable Identifying possible competitive advantages Choosing the right competitive advantage Choosing a positioning strategy Market Segmentation Topics Goal 4: Realize how companies position their products

  21. 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 Identifying possible competitive advantages Choosing the right competitive advantage Choosing a positioning strategy Market Segmentation Topics Goal 4: Realize how companies position their products

  22. Developing a Positioning Statement • Positioning statements summarize the company or brand positioning • EXAMPLE: To (target segment and need) our (brand) is (concept) that (point-of-difference) Goal 4: Realize how companies position their products

  23. Communicating the Positioning • Companies must be certain to DELIVER their value propositions. • Positions must be monitored and adapted over time. Goal 4: Realize how companies position their products

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