basic06_ppt.ppt 221KB Nov 01 2010 08:16:58 PM

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Chapter Six

Segmentation, Targeting,

and Positioning:

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Roadmap:

Previewing the Concepts

1. Define the three steps of target marketing: market segmentation, market targeting,

and market positioning.

2. List and discuss the major bases for segmenting consumer and business markets.

3. Explain how companies identify attractive market segments and choose a target

marketing strategy.

4. Discuss how companies position their products for maximum competitive

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6-3

Strategy

 _{Sells multiple brands}

within the same product category for detergents, soaps, and other goods.

 _{Each brand features a}

different mix of benefits and appeals to a different segment.

 _{Product modifications}

appeal to different niches

within certain segments.

P & G – Segments the Market

Case Study

The Payoff

 _{P&G generates revenues} in excessive of $4 billion in U.S. laundry detergent

market alone.

 _{Tide has 34% share of}

powder and 24% share of liquid market segments.

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Steps in Target Marketing

 _{Market segmentation}

– Dividing a market into smaller groups of buyers with distinct needs, characteristics, or behaviors requiring separate products or marketing mixes.

 _{Target marketing}

– Evaluating each segment’s attractiveness and selecting one or more to enter.

 _{Market positioning}

– Setting the competitive positioning for the

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Market Segmentation



Key variables:

– Geographic

– Demographic

– Psychographic

– Behavioral



No single way to segment a market.



May combine more than one variable to

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Market Segmentation



Geographic:

– World region or country – Region of country

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Market Segmentation



Demographic:

– Age, gender, family size, family life cycle, income, occupation, education, race,

religion, etc.

– The most popular bases for segmenting customer groups.

– _{Easier to measure than most other types}

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Market Segmentation



Age and Life-Cycle Stage:

– Example: P&G has different toothpastes for different age groups.

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Market Segmentation



Income:

– Identifies and targets the affluent for luxury goods.

– _{People with low annual incomes can be a} lucrative market.

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Market Segmentation



Psychographic:

– Social class – Lifestyle

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Market Segmentation



Behavioral:

– Occasion segmentation

• Special promotions and labels for holidays.

– (e.g., Hershey Kisses)

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Market Segmentation



Behavioral:

– Benefits Sought

• Different segments desire different benefits from products.

– (e.g., P&G’s multiple brands of laundry

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Market Segmentation



Behavioral:

– User Status

• Nonusers, ex-users, potential users, first-time users, regular users

– _{Usage Rate}

• _{Light, medium, heavy} – _{Loyalty Status}

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Market Segmentation



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.

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Market Segmentation



Geodemographic:

– Claritas, Inc.

– Potential Rating Index for Zip Markets (PRIZM)

– _{Based on U.S. Census data}

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Segmenting Business Markets



Consumer and business markets use

many of the same variables for

segmentation.



Business marketers can also use:

– _{Operating Characteristics} – _{Purchasing Approaches} – _{Situational Factors}

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Segmenting International

Markets



Factors used:

– Geographic location – Economic factors

– _{Political and legal factors} – _{Cultural factors}



Intermarket segmentation:

– _{Segments of consumers who have similar}

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Requirements for Effective

Segmentation

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Evaluating Market Segments

 _{Segment Size and Growth}

– Analyze current segment sales, growth rates, and expected profitability.

 _{Segment Structural Attractiveness}

– Consider competition, existence of substitute products, and the power of buyers and

suppliers.

 _{Company Objectives and Resources}

– Examine company skills & resources needed to succeed in that segment.

– _{Offer superior value and gain advantages over}

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Target Marketing Strategies



Undifferentiated (mass) marketing

– Ignores segmentation opportunities



Differentiated (segmented) marketing

– Targets several segments and designs separate offers for each



Concentrated (niche) marketing

– _{Targets one or a couple small segments}



Micromarketing (local or individual

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Micromarketing



Tailoring products and marketing

programs to suit the tastes of specific

individuals and locations.

– Local Marketing: Tailoring brands and promotions to the needs and wants of local customer groups—cities,

neighborhoods, specific stores.

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Choosing a Market Coverage

Strategy



Factors to consider:

– Company resources – Product variability

– Product’s life-cycle stage – Market variability

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Socially Responsible Targeting

 _{Smart targeting helps both companies and}

consumers.

 _{Target marketing sometimes generates}

controversy and concern.

– Vulnerable and disadvantaged can be targeted.

– Cereal, cigarette, beer, and fast-food marketers have received criticism.

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Positioning for Competitive

Advantage



Product’s position is the way the

product is

defined by consumers

on

important attributes, or as the place the

product occupies in consumers’ minds

relative to competing products.

– _{Perceptual position maps can help define}

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Choosing a Positioning Strategy



Identify a set of possible competitive

advantages on which to build a

position.



Choose the right competitive

advantages.

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Identifying Possible

Competitive Advantages



Key to winning target customers is to

understand their needs better than

competitors do and to deliver more

value.



Competitive advantage

– extent to

which a company can position itself as

providing superior value.

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Identifying Possible

Competitive Advantages



Product differentiation



Services differentiation



Image differentiation

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Positioning Errors



Underpositioning:

– Failing to really position the company at all.



Overpositioning:

– Giving buyers too narrow a picture of the company.



Confused Positioning:

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Choosing Right Competitive

Advantages



Important



Distinctive



Superior



Communicable



Preemptive

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Overall Positioning Strategy



Full positioning of the brand is called

the brand’s

value proposition.



Potential value propositions include:

– _{More for More}

– More for the Same

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Communicating and Delivering

the Chosen Position



Company must take strong steps to

deliver and communicate the desired

position to target consumers.



The marketing mix efforts must support

the positioning strategy.



Must monitor and adapt the position

over time to match changes in

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Rest Stop:

Reviewing the Concepts

1. Define the three steps of target

marketing: market segmentation, market targeting, and market positioning.

2. List and discuss the major bases for segmenting consumer and business markets.

3. Explain how companies identify

attractive market segments and choose a target marketing strategy.

4. Discuss how companies position their products for maximum competitive