Market Segmentation, Targeting, and Positioning Strategies

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Chapter 8

• Market Segmentation, Targeting, and Positioning
  Strategies

2
Objectives

• Define market
• Explain market segmentation
• Relate marketing mixes to target markets
• Identify various marketing strategies
• Understand key market segment selection
  considerations
• Identify and apply segmentation variables
• Understand positioning strategy

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What is a Market?
Ability
Willingness
Resources
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Segmentation Works Because ...

• Not all buyers alike
• Subgroups may be identified
• Subgroups smaller and more homogeneous
• Easier to satisfy smaller groups

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Major Steps in Segmentation Targeting
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Choosing Market Segments

• Distinguishing/stable characteristic
• Significant size
• Accessible with distribution promotion
• Responsive (similar needs)
• Measurable potential

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Segment Cross-Classification Aerobic Shoes
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Matching the Marketing Mix to Target Market

• Our target market
• Women aged 14-21 living in the United States

The right Product? Price? Promotion? Place?
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Possible Strategies for Target Marketing

• Undifferentiated marketing

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Possible Strategies for Target Marketing

• Concentrated Marketing
• 80 / 20 Principle
• Majority fallacy

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80/20 Rule

• A relatively small percentage of customers
  accounts for a disproportionately large share of
  the sales

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Possible Strategies for Target Marketing

• Differentiated marketing
• Multiple market segmentation

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Possible Strategies for Target Marketing

• Custom Marketing To each his/her own.

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Custom Marketing

• One-to-one marketing
• Uses data based-marketing and information
  technology
• For example...

• Your name
• Room preferences
• Special requests
• Smoking or non smoking
• Credit card number
• Frequent hotel user discount

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Bases for Segmenting Consumer Markets
Demographic
Sociographic
Lifestyle
Geographic
Behavior
Consumption
Predispositions
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Bases for Segmenting Business Markets
Geography
Organizational charateristics
Purchase behavior
Usage patterns
Organizational predispositions
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Positioning

• The way consumers perceive the brand relative to
  its competition
• ID competitive advantage
• Stress salient characteristics
• Differentiate

Positioning
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Market Positioning Map Tea - 1980s
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Repositioning Tea - Late 1990s
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Review

• Define market
• Explain market segmentation
• Relate marketing mixes to target markets
• Identify various marketing strategies
• Understand key market segment selection
  considerations
• Identify and apply segmentation variables
• Understand positioning strategy