1. Market Segmentation, Targeting and Positioning

2. Market Segmentation

3. Homogenous group of customers
Definition of a Segment
Homogenous group of customers

4. Traits that lead to behavior
How can we segment?
Two routes
Behavior
Traits that lead to behavior

5. Traits that lead to behavior
Drilling Down…
Behavior
product purchase
brand purchase
purchase timing
purchase quantity
purchase location
Traits that lead to behavior
Demographics
Psychographics
Geographics

6. Examples of Behavior-Based Segmentation
Product purchase behavior
Brand purchase behavior
brand loyalty
Purchase quantity
Heavy and light users
Purchase location
In-store vs. catalog/online

7. Purchase Timing Segmentation
Early majority
(34 %)
Late majority
(34 %)
Innovators
(2.5 %)
Early
Adopters
(13.5 %)
Laggards

8. Buying behavior by ZIP Codes An example application of psychographics
Traits that Lead to Behavior
Demographics
ethnic background
social class
age
gender
Occupation
Geographics
Buying behavior by ZIP Codes
Psychographics
An example application of psychographics
Psychogeographics?

9. B-to-B Segmentation

10. Segment by firmographics
Types of Segments
Segment by firmographics
business of customer
Size of customer
Geographics
E.g., Home builders
Rural
Suburban
urban home builders

11. Decision making process Relationship-based vs. criterion-based
Behavior of Business as a Customer
Loyalty to suppliers
Key decision criteria
Price
Quality
Decision making process
Individual vs. group
Group composition
Relationship-based vs. criterion-based

12. Segments defined by combining multiple segmentation variables
Composite Segments
Segments defined by combining multiple segmentation variables
E.g.,
Price Sensitivity
Benefits sought
Age
Gender
Lifestyle

13. Smaller and more precisely defined segments result in …
precise definition of customer needs
better response to marketing efforts
greater loyalty
lower price sensitivity
higher profitability of the customer

14. Lower economies of scale
On the other hand …..
Smaller segments
Smaller markets
Lower economies of scale
Higher costs
Lower profits

15. Targeting

16. Promoting our products to the selected customer segments.
Definition of Targeting
Promoting our products to the selected customer segments.

17. An example of a well-targeted offer
Demo from buy.com

18. Why Target?

19. Benefits of targeting Better response rate Higher efficiency
Lower costs
Higher efficiency

20. How can we target?
Business 2.0 article on Ashford

21. Positioning

22. Customers’ perception of the product
Definition of a Position
Customers’ perception of the product
Product image
What its unique features are
Who its customers are
What its personality is

23. Composite (experiential).
Different Positioning Concepts
Simple (functional).
Composite (experiential).
Abstract (symbolic).