chapter 4 MARKET SEGMENTATION, TARGETING AND POSITIONING part two: making sense of markets chapter 4 MARKET SEGMENTATION, TARGETING AND POSITIONING

an opening challenge You are the marketing director of a loss-making brewery. You need to develop new products to revitalise the business but you do not have the resources to launch a full range. How will you choose what type of beer to sell and to whom?

agenda market selection market segmentation targeting strategies positioning

market attractiveness market opportunity competitive advantage the objectives of the organisation

segmentation, targeting and positioning market segmentation targeting positioning

market segmentation and targeting: why do it? many markets are demand-driven consumers and customers are more demanding few mass markets remain markets are fragmenting

what is market segmentation? ‘the process of dividing a total market into subgroups (segments) such that each segment consists of buyers and users who share similar characteristics but are different from those in the other segments’ (Masterson and Pickton, 2014) ref needs a page no. (glossary)

criteria for determining good market segments measurable homogeneous heterogeneous substantial accessible operational

consumer segmentation bases demographic socio-economic or social grading geographic geo-demographic psychographic mediagraphic behavioural

life-stage segments (BRMB-TGI) fledglings flown the nest nest builders mid-life dependents unconstrained couples playschool parents primary school parents secondary school parents hotel parents senior sole decision makers empty nesters non-standard families unclassified

examples of behavioural segmentation bases purchase occasion benefits sought usage rate user status readiness stage attitude to product involvement adopter type loyalty status

using multiple segmentation variables AQ – re-set figure type

organisational segmentation bases macro-segmentation geographic type of organisation industry grouping/business sector customer size

organisational segmentation bases micro-segmentation user status trade category benefits sought loyalty status readiness stage adopter type purchasing practices buy class

nested approach to B2B market segmentation AQ – re-set figure type

target marketing (targeting) ‘the selection of one or more market segments towards which marketing efforts can be directed’ (Masterson and Pickton, 2014, glossary)

targeting strategies AQ – re-set figure type

evaluating a segment for targeting sufficient current and potential sales/profits? potential for sufficient future growth? not over-competitive? no excessive barriers to entry or exit? unsatisfied needs that the company can serve well?

positioning ‘the place a brand is perceived to occupy in the minds of the target market relative to other competing brands’ (Masterson and Pickton, 2010: 148)

multi-attribute mapping AQ – re-set figure type

perceptual mapping AQ – re-set figure type

positioning strategies attributes/product features price/quality usage occasions benefits or needs user competitive against another brand a different product class

re-positioning e.g. McDonalds have been trying to move to a healthier position in people’s perceptions (photo courtesy of Dave Pickton)

five-stage process identify the total market identify market segments select target market segment(s) establish competitors’ positions establish own position

summary markets are people, not products products should be targeted at specific market groups (segments) use multi-variable segmentation opportunities for differentiation develop clear positioning

reference Masterson, R. and Pickton, D. (2014) Marketing: An Introduction, 3rd edn. London: SAGE.