Chapter Seven Segmentation, Targeting and Positioning: Building the Right Relationships with the Rig

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Chapter SevenSegmentation, Targeting and
Positioning Building the Right Relationships
with the Right Customers

• with Duane Weaver

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Segmentation/Positioning

• Segment markets.
• Identify basis for segmentation.
• Develop segmentation profiles.
• Target segment(s).
• Measure of segment attractiveness.
• Select the target segment(s).
• Position for target segment(s).
• Develop positioning for each segment.
• Develop appropriate marketing mix.

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Segmentation Variables

• Geographic.
• Area, population density, climate, etc.
• Demographic.
• Age, sex, life cycle, income, job, etc.
• Psychographic.
• Lifestyle, personality, etc. Dividing a market
  into different groups based on
• Social class.
• Lifestyle.
• Personality characteristics.
• Behavioural.
• Benefits sought, status, usage rate, loyalty,
  attitudes, etc.

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Market Segmentation (How To)

• Best to use multiple approaches in order to
  identify smaller, better-defined target groups.
• Start with a single base and then expand to other
  bases.

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Segmenting Business Markets

• Consumer and business markets use many of the
  same variables for segmentation.
• Business marketers can also use
• Operating characteristics.
• Purchasing approaches.
• Situational factors.
• Personal characteristics.

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Evaluating Market Segments

• Segment size and growth.
• Analyze current segment sales, growth rates and
  expected profitability.
• Segment structural attractiveness.
• Consider effects of competitors, existence of
  substitute products, the power of
  buyers/suppliers.
• Company objectives and resources.
• Examine company skills and resources needed to
  succeed in that segment.
• Offer superior value/gain competitive advantage.

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Segment Success Criteria

• Measurable Ability to measure numerically.
• Accessible Ability to reach segment.
• Substantial Ability to support the business.
• Differentiable Ability to find unique position
  in segment.
• Actionable Ability to pursue and capture the
  segment.

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Levels of Segmentation

• Mass marketing.
• No segments and single marketing mix.
• Differentiated marketing.
• Large segments with specific marketing mixes.
• Niche marketing.
• Small segments with specialized marketing mixes.
• Micro-marketing.
• Customized marketing to individuals.

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Undifferentiated (Mass Marketing)

• Focus is on common (not different) needs of
  consumers.
• Product and marketing program are geared to the
  largest number of buyers.
• Uses mass advertising and distribution.
• Henry Fords Model T is an excellent example of
  undifferentiated or mass marketing.

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Differentiated Marketing

• Firm targets several market segments and designs
  separate offers for each.
• The goal is to have higher sales and a stronger
  position with each market segment.
• This approach increases the costs of doing
  business.
• General Motors claims to make a car for every
  segment.

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Niche Marketing

• The focus is acquiring a large share of one or a
  few segments of niches.
• Generally, there are fewer competitors.
• The Internet is ideal for targeting small niche
  markets.
• There is some risk in focusing on only one market.

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Micromarketing

• Tailoring products and marketing programs to suit
  the tastes of specific individuals and locations.
• Local Marketing Tailoring brands and promotions
  to the needs and wants of local customer
  groupscities, neighbourhoods, specific stores.
• Individual Marketing Tailoring products and
  marketing programs to the needs and preferences
  of individual customers.

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Mass Customization

• The process of creating customer-unique value by
  designing products and services tailor-made to
  individual needs, on a large scale.
• Having your next car or sneakers built to order?
  (life insurance e.g.)

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Successful Positioning

• Product position.
• How a product is viewed by consumers relative to
  competing products.
• Three positioning steps.
• Identify competitive advantages on which to build
  a differentiated position.
• Choose the right competitive differentiation.
• Select an overall positioning strategy.

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Gaining Competitive Advantage

• Key to winning target customers is to understand
  their needs better than competitors do and to
  deliver more value.
• Competitive advantage extent to which a company
  can position itself as providing superior value.

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Identifying Competitive Advantage

• Product differentiation.
• Consistency, durability, reliability,
  reparability.
• Services differentiation.
• Speed, convenience, careful delivery.
• Image differentiation.
• Convey benefits and positioning.
• People differentiation.
• Hiring, training better people than the
  competition.
• Get into Groups of three and select a product you
  think has market dominance. Discuss the
  competitive advantage that company holds in the
  market place. What is it? (be prepared to share
  with the class).

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Successful Differentiation

• Important of value to consumers.
• Distinctive obvious and clear.
• Superior better value than the competitors.
• Communicable explainable.
• Pre-emptive defendable and unique.
• Affordable delivers value for cost.
• Profitable company can make money.

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Positioning Errors

• Under-positioning.
• Failing to really position the company at all.
• Over-positioning.
• Giving buyers too narrow a picture of the
  company.
• Confused positioning.
• Leaving buyers with a confused image of a company.

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Value Propositions
Price
Benefits
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Communicating and Delivering the Chosen Position

• Take strong steps to deliver and communicate the
  desired position to target consumers.
• Support positioning strategy with marketing mix
  efforts.
• Monitor and adapt the position over time to match
  changes in consumer needs and competitors
  strategies.

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THANKS!
Does Market Segmentation and Customer Positioning
enable marketers to hit the right
buttons providing differentiated value at a
profit???
ITS ALL ABOUT THE LEVERAGEBABY!