Chapter 7 Segmentation, Targeting, and Positioning. Introduction.
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Chapter 7Segmentation, Targeting, and Positioning
We have different customers. Each customer is free to have her own aspirations. Our intention is to respond as well as possible to each customer aspiration. Some want to be gorgeous, some want to be natural, and we just have to offer them the best quality and the best product to satisfy their wishes and their dreams.
—L’Oreal CEO Jean-Paul Agon
On understanding segmentation
Assumes heterogeneity among countries
Assumes homogeneity within a country
Focuses on macro-level cultural differences
Relies on clustering of national markets
Less emphasis on within-country segments
Assumes emergence of segments that transcend national boundaries
Recognizes existence of within-country differences
Emphasizes micro-level differences
Segments micro markets within and among countries
What are the trends?
2004 Per Capita Income
United States 41,440
United Kingdom 33,630
2004 Income Adjusted for Purchasing Power
United States 39,820
Hong Kong 31,560
In focusing on the needs and wants of one gender, do not miss opportunities to serve the other
Companies may offer product lines for both genders
Nike, Levi Strauss
25 to 50% of a country’s population
Most comfortable with the familiar
Content with the comfort of home, family, friends, and community
Lack power and affluence
Harbor little hope for upward mobility
Tend to be either resentful or resigned
Concentrated in high-crime urban inner city
Attitudes tend to affect the rest of society
The population of many countries includes ethnic groups of significant size.
Three main groups in the United States include African-Americans, Asian-Americans, and Hispanic Americans.
40-plus million Hispanic Americans (14% of total population) with $560 billion annual buying power
CA Mexicans have after-tax income of $100 billion
The number of Hispanic teens will rise from 12 percent of the U.S. teen population to 18 percent in the next decade.
Concentrated global marketing
Single segment of global market
Look for global depth rather than national breadth
Ex: Chanel, Body Shop
Differentiated global marketing
Two or more distinct markets
Wider market coverage
Ex: P&G markets Old Spice and Hugo Boss for Men