SEGMENTATION AND POSITIONING MARKETING MANAGEMENT SESSION 6 October 6, 1999

SESSION OUTLINE Segmentation: –Definition –Steps for segmenting the market –Criteria of a good segmentation Choosing a Target Market Positioning –Definition –Perceptual maps –Positioning strategies Video case: Creating Bread

DEFINITION OF A SEGMENT Group of people With similar demand curves Which exists in the market Can be described with appropriate variables Differs from other segments

STEPS IN SEGMENTING A MARKET Define generic and product-markets Select behavioral or attitudinal variables to identify segments Examine segments along qualifying and determining dimensions Evaluate segments

CRITERIA OF A GOOD SEGMENTATION PATTERN Measurable Accesible Substantial Actionable

THINGS TO REMEMBER ABOUT SEGMENTATION Segments must exist in the marketplace More than one segmentation pattern may exist Segments can shift over time Targeting one or more segments is more profitable than targeting the entire market Segmentation is at the core of a successful marketing strategy

TARGETING STRATEGIES Undifferentiated marketing Differentiated marketing Concentrated marketing

POSITIONING Part of the marketing strategy which allows to give the product/service its own identity Positioning is a competitive tool Positioning can be operated at the physical level or at the perceptual level A strong position in buyers’ minds gives the product a competitive advantage

PERCEPTUAL MAPS Indicate where a product stands in buyers’ minds relative to its direct and indirect competitors Horizontal and vertical axes are perceived relevant dimensions of the product category Distances between two brands are perceived competitive distances Ideal tool for positioning strategies

POSITIONING STRATEGIES Move brand closer to ideal point Move ideal point closer to brand Change relevance of dimensions Introduce a new brand close to ideal point

NEXT CLASS Product decisions, chapter 8 Definition of product, classifications Product decisions Review for mid-term