1. Establish overall strategy or objectives segmentation strategy must be consistent with and derived from the firm's mission and objectives, and SWOT 2. Segmentation Bases demographic: group customers according to easily measured, objective characteristics such as age, gender, income, education, race, occupation, religion, marital status, family size and family life cycle, and home ownership geographic: group people by where they live psychographic: allow people to describe themselves by using those characteristics that help them choose how they occupy their time (behaviour) and what underlying psychological reasons determine those choices. three components: self-values, self-concept, lifestyles self-value: goals for life, overriding desires that drive how a person lives his or her life self-concept: the image a person has of himself or herself lifestyle: how we live our lives to achieve goals mostly used psychographic system is the VALS by Strategic Business Insight (SBI), 8 segments 2 dimension (p. 175) motivation: ideal, achievement, self-expression behavioual: group consumers based on the benefits they derive from products or services, their usage rate, their loyalty, and the occasion. occasion: when purchase or buy benefit: benefits derived from the products and services loyalty: strategy of investing in retention and loyalty initiatives to retain the firm’s most profitable customers usage rate ： heavy, regular, light, occassional or a combination of these approaches geodemographic: geographic, demographic, lifestyle characteristics. PSYTE: 60 lifestyles in Canadian neighbourhood. PRIZM CE: by Environmental Research, 66 lifestyles in Canada. 3. Evaluate Segment Attractiveness Whether the sement is worth pursuing Identifiable: firms must determine who is within their market to be able to design products or services to meet their needs. Can’t have too much overlap Reachable: through persuasive communications and product distribution Responsive: people in the segment must react similarly and positively to the firm’s offering Substantial and profitable: measure the segment’s size and growth potential, assess its potential profitability both current and future Customer lifetime value, the total value of purchase of the customer over a lifetime of patronage.

4. Select target market 5. Identify and develop positioning strategy Undifferentiated targeting strategy, or mass marketing: if the product or service is perceived to provide the same benefits to everyone, with no need to develop separate strategies for different groups. Commonly used by smaller firms that offer products and services that consumers perceive to be indistinguishable. Differentiated targeting strategy: a strategy through which a firm targets several market segments with a different offering for each. Help obtain a bigger share of market and increase the market for their products overall. Diversify the business, lower the company’s risk. But can be expensive to develop a plan for each segment. Concentrated (niche) targeting strategy: when an organization selects a single, primary target market and focuses all its energies on providing a product to fit that market’s needs, it is using a concentrated (niche) targeting strategy. Enterpreneurial startup ventures often benefit from using a concentrated strategy, which allows them to employ their limited resources more efficiently. Micromarketing: a firm tailors a product or service to suit an individual customer’s wants and needs, it is undertaking an extremem form of segmentation called micromarketing (one-to- one) marketing. Mass customization refers to when firms providing one- to-one marketing to the massess, e.g. Build a Bear. Positioning: the mental picture or perception (thought, feelings, impressions) that people have about a company and its products or services relative to competitors Elements of positioning statements: target market, offering name or brand, product/service category or concept, unique point of difference/benefits Positioning methods Value: the relationship of price to quality is among the most important considerations for consumers when they make a purchase decision Product Attributes: focuses on those attributes that are most important to the target market, e.g. Product leadership, innovation, quality, performance, design, reliability Benefits and symbolism Positioning by using perceptual mapping A perceptual map displays, in two or more dimensions, the position of products or brands in the consumer’s mind The position of each brand is denoted by a small circle, and the numbered circles denote a consumer’s ideal point – where a particular market segment’s ideal product would lie on the map To derive a perceptual map, follow Determine consumers’ perceptions and evaluations of the firms product or service in relation to competition

To derive a perceptual map, follow Determine consumers’ perceptions and evaluations of the firms product or service in relation to competitors Identify the market’s ideal points and size Identify competitors’ positions Determine consumer preferences Select the position monitor the positioning strategy Repositioning: companies should reposition their brands to keep up with changes in the marketplace or to put a fresh spin on their sales and stodgy brand. If repositioning is not done properly, it has the risk of alinate older, loyal, or current customers. Brand repositioning referss to a strategy in which marketers change a brand’s focus to target new markets or realign the brand’s core emphasis with changing market preferences 5. Identify and develop positioning strategy