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Lecture 9 E-Marketing. Segmentation, Targeting, Differentiation, and Positioning Strategies Instructor: Hanniya Abid Assistant Professor COMSATS Institute of Information Technology. Lets see how Coca cola has used e-Marketing techniques. Objectives.

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Lecture 9 e marketing

Lecture 9E-Marketing

Segmentation, Targeting, Differentiation, and Positioning Strategies

Instructor: HanniyaAbid

Assistant Professor

COMSATS Institute of Information Technology


  • After this lecture , you will be able to:

    • Outline the characteristics of the three major markets for e-business.

    • Explain why and how e-marketers use market segmentation to reach online customers.

    • List the most commonly used market segmentation bases and variables.

Objectives cont
Objectives, cont.

  • Outline the five types of Internet usage segments and their characteristics.

  • Describe two important coverage strategies e-marketers can use to target online customers.

  • Define differentiation and positioning and give examples of companies using them.

The 1 800 flowers story
The 1-800-Flowers Story

  • Jim McCann started 1-800-Flowers as a traditional retailer in New York City in 1976.

  • In 1995, he extended the brand to the Internet.

  • He used SAS data mining software to identify customer segments for better targeting.

    • The software analyzed the clickstreams and purchasing patterns of the firm’s 21 million customers.

The 1 800 flowers story cont

  • In Q4 2009, the firm’s Web site had 767,360 daily visitors, $238.5 million in sales and drew 656,000 new customers.

  • Why do you think better segmentation and targeting lead to reduced phone time and lower costs?

Segmentation targeting overview
Segmentation & Targeting Overview

  • Marketing segmentation is the process of grouping individuals or businesses, according to use, consumption, or benefits of a product or service.

  • Market targeting is the process of selecting market segments that are most attractive to the firm.

Three markets
Three Markets

  • Three important markets sell to and buy from each other:

    • Business Market: Marketing of products for use in the business operation, as components, or for resale.

    • Government Market: Federal, state, county, city, and foreign governments.

    • Consumer Market: The consumer market involves marketing goods and services to end consumers.

Market segmentation bases and variables
Market Segmentation Bases and Variables

  • Marketers create segments to identify and reach the right people at the right time.

    • Geographic location

    • Demographics

    • Psychographics

    • Behavior with regard to the product

  • Companies can also combine bases, such as geodemographics (geography and demographics)

Geographic segments
Geographic Segments

  • Product distribution strategy is a driving force behind geographic segmentation.

  • Countries may be segmented based on Internet usage. (statistics from 2012)

    • China has 384 million users.

    • U.S. has 234 million users .

    • Japan has 96 million users.

    • Pakistan has 30 million users

Top internet languages
Top Internet Languages

Geographic markets may also be evaluated by infrastructure variables and language spoken.

Demographic segments
Demographic Segments

  • In developed nations, users are much like the mainstream population demographically.

  • The heaviest Internet penetration in 2010: 18-29,, suburban, earn

  • Three market segments are of great interest to e-marketers.

    • Millennials

    • Younger generation

    • Online opinion leaders


  • Of those born between 1979 and 1994, most use the Internet.

    • “Confident, connected, and open to change.”

    • 75% have a social networking profile, 83% sleep with their cell phones, and 80% sent a text message in the past 24 hours.

  • This group is a marketing proving ground for the future.

Younger generation
Younger generation

  • The number younger internet users online is increasing.

  • Kids 8-12 do a number of activities online:

    • Play online games (78.1%)

    • Homework (34.2%)

    • Music (28.6%)

    • Videos (26.2%)

    • Surf Web (22.7%)

    • E-mail (20.4%)

Ethnic groups
Ethnic Groups

  • Minority groups are important online markets.

  • English-speaking minorities have a increasing Internet adoption rate.


  • Influentials are individuals who influence others, driving change.

    • A survey was conducted to identify these.

Psychographic segments
Psychographic Segments

  • User psychographics include:

    • Personality

    • Values

    • Lifestyles

    • Activities

    • Interests

    • Opinions

Interest communities
Interest Communities

  • 10 important types of online communities, including social networking.

  • Ways to target online communities.

    • Provide online chats, bulletin boards, and events.

    • Advertise on another firm’s community site.

    • The firm can join the community and post as a member.

Attitudes and behaviors
Attitudes and Behaviors

  • Psychographic information helps e-marketers define and describe market segments.

  • Some marketers believe that a segment’s attitudes toward technology can help determine buying behavior.

    • Forrester Research measures attitudes toward technology with a system called Technographics.

    • Forrester identified 10 consumer Technographics segments in the U.S. (Exhibit 8.10).

Behavior segments
Behavior Segments

  • Two common segmentation variables are benefits sought and product usage.

    • Marketers using benefit segmentation form groups of consumers based on the benefits they desire from product.

    • Marketers often segment by light, medium, and heavy product usage.

    • Marketers can segment users as brand loyal, loyal to a competitive product, switchers, and nonusers.

Benefit segments
Benefit Segments

  • To determine benefits sought, marketers can look at what people actually do online.

    • Online activities

    • Popular Web sites

  • Most popular, according to comScore.com:

    • Google

    • Yahoo!

    • Microsoft

    • AOL

    • Facebook

Usage segments
Usage Segments

  • Marketers can segment according to how consumers use the Internet.

    • Home and work access

    • Mobile access

      • Biggest use is for text and Web browsing.

Social media engagement segments
Social MediaEngagement Segments

Targeting online customers
Targeting Online Customers

  • E-marketers select a targeting strategy.

    • Which targets to serve online

    • Which locations

    • Other factors

  • Two targeting strategies are well-suited for the Internet.

    • Niche marketing

    • Micromarketing

  • The Internet’s big promise is individualized targeting.

Differentiation online
Differentiation Online

  • Kotler defines differentiation as the process of adding meaningful and valued differences to distinguish the company’s offering from the competition.

  • There are a number of differentiation dimensions and strategies for their accomplishment.

Differentiation dimensions
Differentiation Dimensions

  • A firm can differentiate along 5 dimensions:

    • Product

    • Service

    • Personnel

    • Channel

    • Image

Internet specific differentiation strategies
Internet-specific Differentiation Strategies

  • There are 6 differentiation strategies unique to online businesses.

    • Site Environment/Atmospherics

      • Easy downloads, accurate and clear information, easy navigation.

    • Build Trust

      • Strong brand recognition.

      • Privacy policy.

      • Safe and encrypted payment process for transactions

Internet specific differentiation strategies cont
Internet-specific Differentiation Strategies, Cont.

  • Efficient and Timely Order Processing

  • Pricing

    • Majority of firms today differentiate themselves in other ways besides pricing.

  • Customer Relationship Management (CRM)

    • Managing long-term relationships with customers.

  • Invite User-generated Content

    • The key is to trust customers, listen, respond, and learn.


  • Positioning is the process of creating a desired image for a company and its products in the minds of a chosen user segment.

  • The e-marketer’s goal is to build a position on one or more bases that are relevant and important to the consumer.

  • Firms can position brands, the company, the CEO, or individual products.

Bases and strategies for positioning
Bases And Strategies for Positioning

  • Product or service attributes

  • Technology position

  • Benefits position

  • User category position

  • Competitor position

  • Integrator position


  • E-business occurs primarily in three markets

  • Marketing segmentation for E-Marketing

  • Strategies to Niche and Micro marketing

  • Differentiation and positioning

One last thing
One last thing…

  • Visit Google and Bing and look for a local grocer in your area. Compare the searches based on effectiveness of results and how easy are they to use

  • Visit a site of a local retailer and identify what makes the site trustworthy.