Segmentation, Targeting, Differentiation, and Positioning

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Segmentation, Targeting, Differentiation, and
Positioning
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Segmentation
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Market Segmentation Strategies

• Traditional Approaches to Market Segmentation
• Mass Marketing
• Differentiated Marketing
• Multisegment Approach
• Market Concentration Approach
• Niche Marketing

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Bases for SegmentingConsumer Markets

• Behavioral Segmentation
• Segments based on actual behavior or product
  usage
• Demographic Segmentation
• Segments based on demographic factors (e.g.,
  gender, age, income, education, etc.)
• Psychographic Segmentation
• Segments based on state-of-mind issues (e.g.,
  motives, attitudes, opinions, values, lifestyles,
  interests, personality, etc.)
• Geographic Segmentation
• Segments based on geographic location

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Segmenting Consumer Markets

• Sometimes, multiple attributes are combined to
  form segments
• Multi-attribute segmentation via geoclustering
  combines multiple variables to identify smaller,
  better-defined target groups
• PRIZM Geoclustering system uses demographic,
  geographic, lifestyle, and behavioral
  characteristics

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Bases for SegmentingBusiness Markets

• Type of Organization
• Organizational Characteristics
• Benefits Sought or Buying Processes
• Personal and Psychological
• Relationship Intensity

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Segmenting Business Markets

• Rackman and Vincentis proposed a segmentation
  scheme that classifies business buyers into three
  groups
• Price-oriented customers best served via
  transactional selling
• Solution-oriented customers best served by means
  of consultative selling
• Strategic-value customers best served by means
  of enterprise selling

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Segmentation, Marketing Mix, and Targeting
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Creating the Marketing Mix
PRODUCT
PRICE
PLACE
PROMOTION
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Goals for Marketing Mix

• Create synergies
• Use resources effectively
• Maintain consistent and differentiated image
• Link to specific marketing goals and objectives

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Market Share Development Path
Place Strategies
Service Strategies
Price Strategies
Product Strategies
Promotion Strategies
Market Share Index
Service Experience Favorable(0.65)
0.076
Available and Easy to Buy(0.57)
Service Experience Not Favorable(0.35)
0.041
Price Acceptable(0.63)
0.089
Not Available or Easy to Buy(0.43)
Like Product Benefits(0.46)
Price Not Acceptable(0.37)
0.121
Aware of Product(0.71)
Not Attracted to Product(.54)
0.383
Not Aware of Product(0.29)
0.290
1.000
The Market Share index is derived by multiplying
all terms along a given path.
Share Development Path
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Mass Marketing Strategy
Single Marketing Mix
All Customers in the Market
Undifferentiated
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Multisegment Strategy
Multiple Marketing Mixes
More Than One Market Segment
Differentiated
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Market Concentration Strategy
Single Marketing Mix
Focused on a Single Market Segment
Differentiated
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Niche Marketing Strategy
Focused on a Small Niche Market Segment
Single Marketing Mix
Differentiated
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Customized Marketing Strategy
Unique Marketing Mixes
Individual Customers
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Target Marketing Strategies

• Five basic strategies for target market
  selection
• (1) Single Segment Targeting
• (2) Selective Targeting
• (3) Mass Market Targeting
• (4) Product Specialization
• (5) Market Specialization

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Basic Target Marketing Strategies
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Differentiation and Positioning
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Differentiation and Positioning

• Find ways to distinguish and differentiate the
  firms and its product from competitors
• Ensure that customers perceive these differences
  so your product is positioned accurately in their
  minds

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Differentiation

• Differentiated products feature meaningful and
  valuable differences that distinguish the
  companys offering from the competition.
• Identify what is unique and valuable to customers
• Being the provider of these unique and valuable
  benefits leads to competitive advantage
  (separation from direct competition)

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Bases for Differentiation Examples
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Product Differentiation Examples
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Positioning

• Two views of positioning
• Ries and Trout products are positioned in the
  mind of prospect
• Treacy and Wiersema positioning via value
  disciplines
• Product leader firm
• Operationally excellent firm
• Customer intimate firm

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Positioning

• Relative to the competition
• Focus on augmented dimensions
• Positioning Strategies
• Strengthen the Current Position
• Repositioning
• Reposition the Competition

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Positioning and Differentiation

• Positioning statements
• To (target group and need) our (brand) is
  (concept) that (point-of-difference)
• Example To young, active soft-drink consumers
  who have little time for sleep, Mountain Dew is
  the soft drink that gives you more energy than
  any other brand because it has the highest level
  of caffeine.

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Positioning Map

• A tool used to determine the position of a brand
  in the marketplace
• Identify set of competing brands.
• Identify important attributes that consumers use
  when choosing between brands using qualitative
  research (e.g. group discussions).
• Conduct quantitative marketing research where
  customers score each brand on all the key
  attributes.
• Plot brands on a two-dimensional map using the
  attributes.

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Using the Positioning Map

• Ask
• What position do you currently own?
• What position do you want to own?
• Whom should you defeat to own that position?
• Do you have the resources to do it?
• Can you persist until you get there?
• Are your tactics supporting the positioning
  objective you set?
• New entrants
• Spot gaps in the map determine ideal point