Marketing: An Introduction Market Segmentation, Targeting, and Positioning for Competitive Advantage Chapter Seven Lecture Slides –Express Version Course Professor Date

Marketing: An Introduction ©Copyright 2004, Pearson Education Canada Inc. 7-2 Looking Ahead After studying this chapter, you should be able to: Define the three steps of target marketing: market segmentation, market targeting, and market positioning List and discuss the major levels of market segmentation and bases for segmenting consumer and business markets Explain how companies identify attractive market segments and choose a market coverage strategy Discuss how companies position their products for maximum competitive advantage in the marketplace

Marketing: An Introduction ©Copyright 2004, Pearson Education Canada Inc. 7-3 Segmentation, Targeting, and Positioning Develop profiles of resulting segments Market Segmentation Develop measures of segment attractiveness Select the target segment(s) Develop positioning for each segment Develop marketing mix for each segment Identify bases for segmenting market Market targeting Market positioning Figure 7-1

Marketing: An Introduction ©Copyright 2004, Pearson Education Canada Inc. 7-4 Levels of Market Segmentation Mass marketing Segment marketing Niche marketing Micromarketing Figure 7-2

Marketing: An Introduction ©Copyright 2004, Pearson Education Canada Inc. 7-5 Major Segmentation Variables Consumer market: –Geographic National, regional, local, city size, density of population, and climate –Demographic Age, gender, family size/life cycle, income, occupation, education, religion, and ethnic origin –Psychographic Lifestyle, personality –Behavioural Purchase occasion, benefits sought, user status, usage rate, loyalty status, readiness state, and attitude towards product Table 7-1

Marketing: An Introduction ©Copyright 2004, Pearson Education Canada Inc. 7-6 Effectiveness of Segmentation To be useful, market segments must be: –Measurable –Accessible –Substantial –Differentiable –Actionable Segments should be evaluated for: –Size –Growth characteristics –Structural attractiveness –Compatibility with company objectives and resources

Marketing: An Introduction ©Copyright 2004, Pearson Education Canada Inc. 7-7 Selecting Market Segments Company Marketing Mix Market Undifferentiated marketing Company Marketing Mix 1 Company Marketing Mix 2 Company Marketing Mix 3 Segment 1 Segment 2 Segment 3 Differentiated marketing Company Marketing Mix Segment 1 Segment 2 Segment 3 Concentrated marketing Figure 7-3

Marketing: An Introduction ©Copyright 2004, Pearson Education Canada Inc. 7-8 Choosing a Market Coverage Strategy Will depend upon : –Company resources –Degree of product variability –Product life cycle stage –Market viability –Competitors’ marketing strategies

Marketing: An Introduction ©Copyright 2004, Pearson Education Canada Inc. 7-9 Positioning for Competitive Advantage Product position: the way the product is defined by consumers on important attributes, relative to competing products Three Important Steps: –Identifying a set of possibly competitive advantages upon which to build a position –Choosing the right competitive advantages –Selecting an overall positioning strategy

Marketing: An Introduction ©Copyright 2004, Pearson Education Canada Inc Choosing a Positioning Strategy Differences need to be : –Important –Distinctive –Superior –Communicable –Preemptive –Affordable –Profitable Value proposition: the full mix of benefits on which a product/brand is positioned

Marketing: An Introduction ©Copyright 2004, Pearson Education Canada Inc Possible Value Propositions More for more More for the same More for less The same for less Less for much less Figure 7-4 MoreLessThe same More The same Less Price Benefits

Marketing: An Introduction ©Copyright 2004, Pearson Education Canada Inc Looking Back Market segmentation, targeting, and positioning Levels of segmentation Bases of segmentation Market coverage strategy Positioning products for competitive advantage