1. Segmentation, Targeting and Positioning
Linking Customer Needs to Marketing Action

2. Learning Objectives
After studying this chapter, you should be able to:
Define the three steps of target marketing: market segmentation, target marketing, and market positioning
List and discuss the 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
10/29/2014
Jahanzaib Yousaf

3. TARGET MARKETING PROCESS
WHO TO SERVE?
3 STEPS:
Segmentation
Targeting
Positioning
10/29/2014
Jahanzaib Yousaf

4. STP
Market segmentation: dividing market into distinct groups which will require separate marketing mixes
Target marketing: choosing which group(s) to appeal to
Market positioning: creating a clear, distinctive position in the consumer’s mind relative to competition
10/29/2014
Jahanzaib Yousaf

5. Consumer Market Segmentation
Geographic:
Regions
Size/density
Climate
Demographic:
Age/generation
Gender
Family size/life-cycle
Income
Occupation
Religion
Ethnic origin
Psychographic:
Social class
Lifestyle
Personality
Behavioral:
Occasions
Benefits
User status
Usage rate
Loyalty status
Readiness state
Attitude toward product

6. Geographic Segmentation
Divide markets into different geographic units.
Examples:
World Region or Country: Middle East, South Asia or Pakistan, India etc.
Country Region: Punjab, KPK, Sindh, etc.
City or Metro Size: Lahore, Karachi.
Population Density: rural, suburban, urban
Climate: northern areas, southern, tropical

7. Demographic Segmentation
Use Differences in:
age, gender, family size, family life cycle, income, occupation, education, race, and religion
Most frequently used segmentation variable
Ease of measurement and high availability.

8. Psychographic Segmentation
Psychographic segmentation divides a market into different groups based on social class, lifestyle, or personality characteristics.
People in the same demographic classification often have very different lifestyles and personalities.

9. Behavioral Segmentation
Occasion
Special promotions & labels for holidays.
Special products for special occasions.
Benefits Sought
Different segments desire different benefits from the same products.
Loyalty Status
Nonusers, ex-users, potential users, first-time users, regular users.
Usage Rate
Light, medium, heavy.

10. Loyalty Status Segmentation
Hard-core
Split loyals
Shifting loyals
Switchers

11. User & Loyalty Status Segmentation

12. Requirements for Effective Segmentation
To be useful, market segments must be:
Measurable:
Size, purchasing power, and profiles can be measured
Accessible:
Segments can be reached
Substantial:
Large enough to be profitable
Actionable:
Programs can be developed to attract and serve the segments
“Lefties” are hard to identify and measure, so few firms target this segment.

13. Market Preference Patterns

14. Target Marketing Strategies

15. Undifferentiated Marketing (Mass Marketing)
Appeals to a broad spectrum of people
Efficient due to economies of scale
Effective when most consumers have similar needs

16. Differentiated Marketing (Segment Marketing)
Develops one or more products for each of several customer groups with different product needs
Coca-Cola (Coke, Sprite, Diet Coke, etc.)
Procter & Gamble (Tide, Cheer, Gain, Dreft, etc.)
Toyota (Camry, Corolla, Prius, Scion, etc.)

17. Concentrated Marketing (Niche Marketing)
Entails focusing efforts on offering one or more products to a single segment
Useful for smaller firms that do not have the resources to serve all markets
Niches have very specialized interests

18. Micro Marketing Local Marketing
Individual Marketing (one-to-one Marketing)
Segments are so precisely defined that products are offered to exactly meet the needs of each individual
Example: Levi’s Original Spin (custom) jeans, hair stylists
Mass customization is a related approach in which a company modifies a basic good to meet the needs of an individual
Example: Proctor & Gamble’s products at Reflect.com Form Products to Be Sold into Groups

19. Positioning
The place a product occupies in consumers’ minds relative to competing products.

20. Positioning Example
eBay’s positioning: No matter what “it” is, you can find “it” on eBay!

21. Positioning Strategy Competitive advantages Points of Parity (POP)
Points of Difference (POD) => Differentiation
Positioning results from differentiation and competitive advantages.
Positioning may change over time.

22. Positioning Example
To (target segment and need) our (brand) is a (concept) that (point-of-difference).
“To busy mobile professionals who need to always be in the loop, Blackberry is a wireless connectivity solution that allows you to stay connected to people and resources while on the go more easily and reliably than the competing technologies.”

23. Positioning Maps: Luxury SUVs Price vs. Orientation Dimensions

24. Generic Product Positions & Value Propositions

25. In-class Activity
Describe how each of the following brands, companies, or products is positioned: