1. Segmentation, Targeting and Positioning: Building the Right Relationships with the Right Customers
Chapter 9
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Principles of Marketing, Sixth Canadian Edition

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
Principles of Marketing, Sixth Canadian Edition

3. Steps in Market Segmentation, Targeting, and Positioning
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
Figure 9.1
Principles of Marketing, Sixth Canadian Edition

4. Consumer Market Segmentation (Table 9.1)
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
Principles of Marketing, Sixth Canadian Edition

5. Business Markets Segmentation (Table 9.2)
Demographic:
Industry
Company size
Location
Operating variables:
Technology
User/non-user status
Customer capabilities
Situational factors:
Urgency
Specific application
Size of order
Purchasing approaches:
Purchasing organization
Power structure
Existing relationships
General policies
Purchasing criteria
Personal characteristics:
Buyer-seller similarity
Attitude towards risk
Loyalty
Principles of Marketing, Sixth Canadian Edition

6. Segmenting International Markets
International markets can be segmented by:
Geographic location
Economic factors
Political and legal factors
Cultural factors
Intermarket segmentation:
Forming segments of consumers who have similar needs, even though they live in different countries
Principles of Marketing, Sixth Canadian Edition

7. 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
Principles of Marketing, Sixth Canadian Edition

8. Target Marketing Strategies
Three factors used to evaluate segments:
Segment size and growth
Structural attractiveness
Competition, substitute products, power of buyers/suppliers
Company objectives and resources
Figure 9.2
Principles of Marketing, Sixth Canadian Edition

9. Choosing a Target Marketing Strategy
Factors to be considered:
Company resources
Product variability
Product’s life-cycle stage
Market variability
Competitor’s marketing strategies
Principles of Marketing, Sixth Canadian Edition

10. Positioning for Competitive Advantage
Product position: the way the product is defined by consumers on important attributes, relative to competing products
Competitive advantage: an advantage gained over competitors by offering (and delivering) greater value
Sources of differentiation:
Product
Service
Marketing channels
People
Image
Principles of Marketing, Sixth Canadian Edition

11. Which Differences to Promote?
Unique selling proposition (USP): aggressively promoting one benefit to the target audience
Three major positioning errors:
Under-positioning
Over-positioning
Confused positioning
Differences should be:
Important
Distinctive
Superior
Communicable
Pre-emptive
Affordable
Profitable
Principles of Marketing, Sixth Canadian Edition

12. Possible Value Propositions
Full positioning of a brand
Mix of benefits used for positioning
Figure 9.3
Principles of Marketing, Sixth Canadian Edition

13. In Conclusion… The learning objectives for this chapter were:
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
Principles of Marketing, Sixth Canadian Edition