Title: Segmentation, Targeting, and Positioning Building the Right Relationships with the Right Customers
1Segmentation, Targeting, and Positioning
Building the Right Relationships with the Right
Customers
- Suhel Khan
- Oxford College ofLondon
2Learning Goals
- Learn the three steps of target marketing, market
segmentation, target marketing, and market
positioning - Understand the major bases for segmenting
consumer and business marketing strategy - Know how companies identify attractive market
segments and choose target marketing strategy - Realize how companies position their products for
maximum competitive advantage in the marketplace
3Case StudyProcter Gamble
- Sells multiple brands within the same product
category for a variety of products - Brands feature a different mix of benefits and
appeal to different segments
- Has also identified different niches within
certain segments - Product modifications are useful Tide offers
seven different product formulations to serve
different niches needs
4Steps in market segmentation, targeting and
positioning
- Market Segmentation
- Identify bases for segmenting the market
- Develop segment profiles
- Target Marketing
- Develop measure of segment attractiveness
- Select target segments
- Market Positioning
- Develop positioning for target segments
- Develop a marketing mix for each segment
Goal 1 Learn the three steps of target marketing
5Definition
- Market Segmentation
- Dividing a market into distinct groups with
distinct needs, characteristics, or behavior who
might require separate products or marketing
mixes.
Goal 2 Understand the major bases for
segmentation
6Segmenting Consumer Markets
- Geographical segmentation
- Demographic segmentation
- Most popular segmentation
- Psychographic segmentation
- Lifestyle, social class, and personality-based
segmentation - Behavioral segmentation
Goal 2 Understand the major bases for
segmentation
7Geographic Segmentation Variables
- World region or country
- U.S. region
- State
- City
- Neighborhood
- City or metro size
- Density
- Climate
Goal 2 Understand the major bases for
segmentation
8Demographic Segmentation Variables
- Age
- Gender
- Family size
- Family life cycle
- Income
- Occupation
- Education
- Religion
- Race
- Generation
- Nationality
Goal 2 Understand the major bases for
segmentation
9Behavioral Segmentation Variables
- Occasions
- Benefits
- User Status
- Attitude Toward the Product
- User Rates
- Loyalty Status
- Readiness Stage
Goal 2 Understand the major bases for
segmentation
10Readiness Stages
- Before a customer makes a purchase, he or she
first goes through a series of stages called
buyer readiness. According to Marc Mancini,
these stages are
11- Awareness. Before you can sell, you must make
contact with those who want to purchase. Your
agency should create advertising and promotional
programs thatll make your name conspicuous and
will attract serious buyers. - Knowledge. Once rospective clients know your
name, they begin the process of acquiring
knowledge about what you can offer. Therefore,
your advertising efforts should establish you as
an expert perhaps even a specialist in one or
more niche areas.
12- Liking. We all tend to buy from people or
companies we feel positive about. Entertaining
ads, for example, will convey warmth and the
humanity of your agency. Direct your creative
efforts toward making your agency seem joyful,
inviting and approachable. - Preference. Benefits statements are the key to
making prospective clients prefer your agency
over another. Provide target customers with
reasons to do business with you.
13- Conviction. Your advertising should build the
customers certainty that youre the agency to
call first. Client testimonials, for example,
provide just the right reinforcement for the
preference youve created. - Purchase. Once prospective clients have decided
to seek you out, expert sales skills are critical
to helping them make the right purchase.
14Segmenting Business Markets
- Demographic segmentation
- Industry, company size, location
- Operating variables
- Technology, usage status, customer capabilities
- Purchasing approaches
- Situational factors
- Urgency, specific application, size of order
- Personal characteristics
- Buyer-seller similarity, attitudes toward risk,
loyalty
Goal 2 Understand the major bases for
segmentation
15Segmenting International Markets
- Geographic segmentation
- Location or region
- Economic factors
- Population income or level of economic
development - Political and legal factors
- Type / stability of government, monetary
regulations, amount of bureaucracy, etc. - Cultural factors
- Language, religion, values, attitudes, customs,
behavioral patterns
Goal 2 Understand the major bases for
segmentation
16Requirements for Effective Segmentation
- Measurable
- Size, purchasing power, and profile of segment
- Accessible
- Can be reached and served
- Substantial
- Large and profitable enough to serve
- Differentiable
- Respond differently
- Actionable
- Effective programs can be developed
Goal 2 Understand the major bases for
segmentation
17Target Marketing
- Target Market
- Consists of a set of buyers who share common
needs or characteristics that the company decides
to serve
Goal 3 Know how companies identify and target
attractive segments
18Target Marketing
- Evaluating Market Segments
- Segment size and growth
- Segment structural attractiveness
- Level of competition
- Substitute products
- Power of buyers
- Powerful suppliers
- Company objectives and resources
Goal 3 Know how companies identify and target
attractive segments
19Target Marketing
- Selecting Target Market Segments
- Undifferentiated (mass) marketing
- Differentiated (segmented) marketing
- Concentrated (niche) marketing
- Micromarketing (local or individual)
Goal 3 Know how companies identify and target
attractive segments
20Choosing a Target Marketing Strategy
- Considerations include
- Company resources
- The degree of product variability
- Products life-cycle stage
- Market variability
- Competitors marketing strategies
Goal 3 Know how companies identify and target
attractive segments
21Target Marketing
- Socially Responsible Targeting
- Some segments, especially children, are at
special risk - Many potential abuses on the Internet, including
fraud Internet shoppers - Controversy occurs when the methods used are
questionable
Goal 3 Know how companies identify and target
attractive segments
22Positioning
- Positioning
- The place the product occupies in consumers
minds relative to competing products. - Typically defined by consumers on the basis of
important attributes. - Involves implanting the brands unique benefits
and differentiation in the customers mind. - Positioning maps that plot perceptions of brands
are commonly used.
Goal 4 Realize how companies position their
products
23Choosing a Positioning Strategy
Topics
- Differentiation can be based on
- Products
- Services
- Channels
- People
- Image
- Identifying possible competitive advantages
- Choosing the right competitive advantage
- Choosing a positioning strategy
Goal 4 Realize how companies position their
products
24Market Segmentation
Topics
- How many differences to promote?
- Unique selling proposition
- Several benefits
- Which differences to promote? Criteria include
- Important
- Distinctive
- Superior
- Communicable
- Preemptive
- Affordable
- Profitable
- Identifying possible competitive advantages
- Choosing the right competitive advantage
- Choosing a positioning strategy
Goal 4 Realize how companies position their
products
25Market Segmentation
Topics
- Value propositions represent the full positioning
of the brand - Possible value propositions
- More for More
- More for the Same
- More for Less
- The Same for Less
- Less for Much Less
- Identifying possible competitive advantages
- Choosing the right competitive advantage
- Choosing a positioning strategy
Goal 4 Realize how companies position their
products
26Developing a Positioning Statement
- Positioning statements summarize the company or
brand positioning - EXAMPLE To (target segment and need) our (brand)
is (concept) that (point-of-difference)
Goal 4 Realize how companies position their
products
27Communicating the Positioning
- Companies must be certain to DELIVER their value
propositions. - Positions must be monitored and adapted over
time.
Goal 4 Realize how companies position their
products