1. Segmentation, Targeting and Positioning
Chapter 7

2. Getting it right?

3. Designing a Customer-Driven Marketing Strategy

4. Finding Market Opportunities
This slide relates to material on pp
: Indicates place where slide “builds” to include the corresponding point.
Finding Market Opportunities
“needs” all customers have
mobility
similar needs
dissimilar products
human
transport
generic markets
product-
market
product-
market
product-
market
similar needs
similar products
bikes | cars | trucks
increasingly-
homogeneous
“needs” :
narrow
market
job | recreation : :

5. Finding Market Opportunities
This slide relates to material on pp
: Indicates place where slide “builds” to include the corresponding point.
Finding Market Opportunities
disaggregating
“needs” all customers have
generic markets
product-
market
transportation
riders
exercisers
off-road
adventurers
environmentalists
socializers :
narrow
market
narrow
market : :

6. Finding Market Opportunities
This slide relates to material on pp
: Indicates place where slide “builds” to include the corresponding point.
disaggregating
re-aggregating : :
status
dependability

7. Newer Techniques data mining CRM (Customer Relationship Management)
This slide relates to material on pp
: Indicates place where slide “builds” to include the corresponding point.
Newer Techniques
data mining
CRM (Customer Relationship Management)
shopping behaviour analysis
Summary Overview
Computer-aided methods afford marketers additional help in segmenting markets. The ability of the computer to record, sort, recombine, and analyze a great many variables relating to consumer behaviour at the same time allows marketers to develop much more sophisticated market segments.
Key Issues
Among the techniques are as follows:
Clustering techniques: try to find similar patterns within sets of data.
Customer databases:
Past customer behaviour is often the source of information.
Database sorting is especially helpful in providing services.
Discussion Question: How do you provide information to marketers that are attempting to meet your needs?
Customer relationship management (CRM):
Sophisticated modeling techniques can predict the types of products or services an individual customer might want, based on the information stored in the database.
Anticipation of emerging needs helps a marketer to maintain a long-term relationship with customers. : : :

8. Market Segmentation Key consumer variables:
Dividing a market into groups with distinct needs, characteristics, or behaviors that might require separate marketing strategies or mixes
Key consumer variables:
Geographic
Demographic
Psychographic
Behavioral
Geo – dividing mkt into diff units (regions, countries)
Demo – based on age, gender, family size, life cycle, HHI, occupation, edu, eht or cult grp & generation
Psycho – soc class, lifestyle or personality characteristics
Behav – based on knowledge, attitudes, uses or responses to prod

9. Market Segmentation Behavioral segmentation
Use multiple segmentation bases to identify smaller, better-defined target groups
Start with a single base and then expand to other bases
Multivariable segmentation systems such as PRIZM NE (New Evolution) are becoming more common
Behav seg - Dividing buyers into groups based on consumer knowledge, attitudes, uses, or responses to a product
Occasions: Helps firms build up product usage
Benefits sought: Different segments desire different benefits from products
User status:
Non-users, ex-users, potential users, first-time users, regular users
Usage rate:
Light, medium, heavy
Loyalty status:
Brands, stores, companies
Divide into groups by degree of loyalty

10. Segmenting International Markets
Factors used:
Geographic location
Economic factors
Political and legal factors
Cultural factors
Intermarket segmentation:
Segmenting consumers who have similar needs and buying behavior even though they are located in different countries

11. Effective Segmentation
Measurable
Accessible
Substantial
Differentiable
Actionable
Measurable – eg. left handers 7%
Accessible – fragrance comp – single men & woman who stay out late and socialize a lot
Substan – car for people 7ft tall
Diff – married or unmarried respnd the same
Actionable – sml airline staff to sml to segment mkts

12. Market Targeting Market targeting involves:
Evaluating marketing segments
Consider segment size and growth, segment structural attractiveness, and company objectives and resources
Selecting target market segments
Alternatives range from undifferentiated marketing to micromarketing
Being socially responsible

13. Selecting Target Market Segments
Targeting strategies include:
Undifferentiated (mass) marketing
Differentiated (segmented) marketing
Concentrated (niche) marketing
Micromarketing (local or individual marketing)
Undifferentiated – ignores seg opport
Differentiated – target seceral seg & design for each VF corp (Wrangler to North face)
Niche – 1 or 2 sml seg Sabian cymbals

14. Choosing a Targeting Strategy
Factors to consider:
Company resources
Product variability
Product’s life-cycle stage
Market variability
Competitors’ marketing strategies
LO 3: Explain how companies identify attractive market segments and choose a market-targeting strategy

15. Ethical Issues in Targeting
This slide relates to material on pp. 71.
: Indicates place where slide “builds” to include the corresponding point.
exploitation
“desires”
needs
wants
cravings
harm
emotional
financial
other?
Socially responsible
Ethical issues--some critics argue that target marketing:
exploits consumers;
makes them want things they don’t need;
may even cause physical, emotional, or financial harm.
Discussion Question: What types of companies are criticized the most for exploiting particular target markets?
Success in international marketing requires even more segmenting, because there are so many countries, languages, and unique cultures.
However, segmenting international markets adds just one step to the whole process of segmentation. First, marketers must segment by country or region, and then proceed with the same basic segmentation approaches already discuss : :

16. Differentiation and Positioning
Product’s position:
Important attributes defined by consumers
The place the product occupies in consumers’ minds relative to competing products
“Product are created in a factory, but brands are created in the mind”
Blackberry positioned as a personal productivity aid
iPhone as high tech w. high style
NOT nokia

17. This slide relates to material on pp. 77-82.
: Indicates place where slide “builds” to include the corresponding point.
Positioning
High moisturizing
low moisturizing 2 1 4 5 7 3 8 6
Jergens
Zest
Dove
Olay
Safeguard
Summary Overview
This diagram shows the output of a computer program that does positioning analysis.
Key Issues
Two attributes of soap that account for the greatest difference in consumer perceptions:
degree to which the soap is a deodorant soap.
degree to which the soap is a moisturizing soap;
The closer that any two dots are to each other, the more similar those brands are in the minds of consumers.
Each segment may have its own preferences. The circles refer to the size of market attracted to a combination of attributes.
Discussion Question: What is the largest segment in the diagram? What brands serve that segment best?
Positioning may also lead to combining instead of segmenting, if a firm can successfully appeal to several segments with the same product.
Therefore, positioning studies can be part of a broader analysis because they:
identify important attributes of the product offerings in a market;
identify what offerings are likely to appeal to segments;
provide a basis for changing the marketing mix, should a marketer decide to reposition a product.
Coast
Lux
nondeodorant
deodorant :
Dial :
Lifebuoy :
Ivory :

18. Differentiation and Positioning
Competitive advantage:
gained by offering greater customer value, either through lower prices or by providing more benefits that justify higher prices

19. Differentiation and Positioning
Identifying possible value differences and competitive advantages:
Key to winning - understand their needs better than competitors do and to deliver more value
Examine the entire customer experience

20. Differentiation and Positioning
Types of differentiation:
Product: Features, performance, style, design
Services: Speedy, convenient or careful delivery
Channels: Coverage, expertise, performance
People: Training staff better than the competitors
Image: Convey distinctive benefits and positioning
Prod – maple leaf foods
Serv – Lexus
Chan – Amazon
People – Westjet – sense of humor
Image – Ritz - Carlton

21. Differentiation and Positioning
Worthwhile differences to promote:
Important
Distinctive
Superior
Communicable
Preemptive
Affordable
Profitable
Important: The difference delivers a highly valued benefit to target buyers.
Distinctive: Competitors do not offer the difference, or the company can offer it in a more distinctive way.
Superior: The difference is superior to other ways that customers might obtain the same benefit.
Communicable: The difference is communicable and visible to buyers.
Preemptive: Competitors cannot easily copy the difference.
Affordable: Buyers can afford to pay for the difference.
Profitable: The company can introduce the difference profitably.

22. Differentiation and Positioning
Value proposition is the mix of benefits on which the brand is differentiated and positioned:
More for more: More benefits for a higher price. – mont blanc, LG, four seasons, gourmet coffee Starbucks, McDs?
More for same: More benefits for the same price. – Lexus “perhaps 4 the 1st time in hist trading a $72000 car for a $36000 would be considered trading up
More for less: More benefits for a lower price. –Same for less: Same benefits for a lower price. – Walmart Best Buy
Less for much less: Fewer benefits for a much lower price. – Giant tiger, Southwest airlines

23. Differentiation and Positioning
Developing a positioning statement:
Format: “To (target segment and need) our (brand) is (a concept) that (point of difference).”
Example: “To busy, mobile professionals who need to always be in the loop, BlackBerry is a wireless connectivity solution that gives you an easier, more reliable way to stay connected to data, people, and resources while on the go.”
Delissio pizza “It’s not delivery, it’s delissio!”

24. Communicating and Delivering the Position
All marketing-mix efforts must support the positioning strategy
Companies must monitor and adapt the position over time
Required to match changes in consumer needs and competitors’ strategies