1. Segmentation Targeting Positioning
Dr. Vesselin Blagoev

2. Segmentation-> Targeting-> Positioning
Define the task for segmenting the market(s)
Select the bases for segmentation
Segment the market(s)
Select the target segments
Product positioning
Develop and execute the marketing programs

3. 2 basic approaches: Mass marketing Segmented marketing
The basic choice of a company is to pursue either a mass marketing strategy or a segmented strategy.
Mass marketing is also known as aggregated marketing and undifferentiated marketing.
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4. Segmented marketing
The basic requirements of the segmented marketing are:
At least one homogeneous segment is found
A marketing mix is devised specifically for the segment(s)
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5. A procedure for segmenting markets
1. Broadly specify area of interest
2. Generate a list of segmentation variables
3. Qualitative analysis
4. Quantitative analysis
5. Apply size, accessibility and
marketing mix control criteria
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6. Segmentation variables
Heterogeneous demand
Segments relating to
Customer characteristics
Segments relating to
Customer behaviour
Demographic
& Geographic
variables
Psychological &
Sociological
variables
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7. Consumer segmentation
Profile
Behavioral
Psychographic
Demographic
Benefits
sought
Purchase
behavior
Lifestyle
Socio-economic
Usage
Purchase
occasion
Personality
Geographic
Perceptions
and
beliefs
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8. Bases for segmentation1
Geographic
National/regional differences in taste and product usage 2
Demographics
Age
Lifecycle
Education
Sex
Family composition
Can differences be distinguished between groups in each of those categories that reflect differences in propensity to purchase, or in product usage? 3
Socio-economic and income
Are consumption or media exposure related to social grad or income level?
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9. Bases for segmentation4
Geodemographics
Does where we live condition how we live, and consequently relate to what we buy? 5
Benefits sought
Are there differences in the benefits sought by different people in the same product? 6
Usage rate and brand loyalty
Are these who consume a lot of a product different from those who consume a little? 7
Psychographics
Is consumption better considered in the context of ‘lifestyle’ groups?
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10. Bases for segmentation8
Situation
Does the situation in which consumption or purchase takes place vary? If so can individuals be grouped according to their situations? 9
Responsiveness
Do people respond differently to aspects of marketing activity? Do they use different distribution channels?
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11. Profile: Demographic & Geographic variables
Size
Age
Sex
Destination
Geographic area
Socioeconomic class
Race
Family life cycle
Family size
Marital status
Income
Occupation
ACORN group
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12. Profile: Socio-economic segmentation
Class
Description A
Upper Middle Class
High managerial/administrative/Professional, I.e. company director or established doctor B
Middle Class
Intermediate managerial/administrative/ or
professional C1
Lower Middle Class
Supervisory/clerical/junior managerial C2
Skilled Working Class
Skilled manual workers D
Working Class
Semi-skilled or unskilled workers E
Pensioners, casual workers and others
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13. ACORN a Geodemographic segmentation
ACORN stands for ‘A classification of residential neighborhoods’. It segments the consumers according to the type of area in which they live into 12 major groups, further refined into 39 types.
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14. ACORN Group ACORN groups in Great Britain % A
Modern family housing with manual workers
9.6 B
Modern family housing, higher income
7.4 C
Older housing of intermediate status
10.4 D
Very poor quality, older, terraced housing
9.2 E
Rural areas
5.8 F
Urban local authority housing
20.6 G
Housing with most overcrowding
2.9 H
Low income areas with immigrants
4.2 I
Students and high status non-family areas
4.3 J
Traditional high status suburbia
19.1 K
Areas of elderly people, often resorts
6.4
Unclass
Other
0.2
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15. ACORN ACORN groups % Population A Agricultural areas 3.4 B
Modern family housing, higher incomes
16.2 C
Older housing of intermediate status
17.6 D
Poor-quality older terraced housing
4.3 E
Better-off council estates
13. F
Less well-off council estates
9.4 G
Poorest council estates
7.6 H
Multiracial areas
3.9 I
High-status non family areas
4.2 J
Affluent suburban housing
15.9 K
Better-off retirement areas
3.8 U
Unclassified
0.7
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16. Benefits sought segmentation (a Behavioural segmentation)
It is axiomatic in marketing that customers buy benefits, not features. Some toothpaste users want white teeth, others fresh breath and others protection from dental decay.
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17. Benefit segmentation for tooth paste
Segment Benefit required Other characteristics
Sensory Flavor+appearance Usually children
Social Sound bright teeth Outgoing and active, young,
sometimes smokers
Worrier Decay prevention Heavy users, families
Independent Low prices Predominantly male, little
loyalty, brand on offer
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18. Benefit segmentation for cars
Pleasure seekers: driving is all about pleasure (freedom, enjoyment, well being)
Image seekers: driving is all about self-image. The car provides feelings of power, prestige, status and self-enhancement. Driving is secondary.
Functionality seekers: driving is only a means of getting from point A to B. Convenience matters.
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19. Benefit segments Do-it-yourselfer (25%)
In the less expensive camera market:
Do-it-yourselfer (25%)
Great pride in good pictures
Gratification from making settings and adjustments
Pride in a complex camera
Regards a good picture the results of expertise
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20. Behavioral segmentation
The most obvious approach when we use behaviouristic characteristics is to study usage rates and brand loyalty:
Heavy users (say every day)
Medium users (maybe once a week)
Light users (say once a month)
Occasional users
Non-users (never used brand)
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21. Behavioral segmentation
Other behaviouristic criteria include:
Loyalty levels
Purchase occasion
User status
Readiness status
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22. Psychological & Sociological variables
Values
Needs
Life style
Group membership
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23. Psychographic segments
Psychographics classify consumers according to their personal traits such as sociability, self-reliance, assertiveness, lifestyles, which cover attitudes, interests and opinions.
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24. Lifestyle segmentation (a Psychographic segmentation)
It tells the marketer about the sort of lifestyle his customer leads, the beliefs and the opinions he holds, the type of interest he has and the background he is from.
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25. Lifestyle segmentation (a Psychographic segmentation)
It is expensive to conduct –
a large number of personal interviews with up to 600 questions being asked.
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26. Lifestyle segmentation
Activities
Interests
Opinions
Demography
Work
Family
Selves
Age
Hobbies
Home
Social issues
Education
Social events
Job
Politics
Income
Vacation
Community
Business
Occupation
Entertainments
Recreation
Economics
Family size
Club membership
Fashion
Dwelling
Food
Products
Geography
Shopping
Media
Future
City size
Sports
Achievements
Culture
Family life style
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27. Psychographic segments
Young sophisticates (15%) : Extravagant, experimental, non-traditional, young; A, B and C1 social classes, educated, affluent, sociable,cultural interests, owner-occupiers, in full-time employment, interested in new products
Cabbages (12%) : Conservative, less quality-conscious, demographically average but more full-time housewives, middle class, average income and education, lowest level of interests in new products, home-centered, indulging in little entertaining
Traditional working class (12%):
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28. Psychographic segments
Coronation Street housewives (14%) : Quality-conscious, conservative, traditional and obsessional, D and E social classes, live relatively more in Lancashire and Yorkshire ITV areas, less educated, lower incomes, part-time employment, lower level of interest in new products, not sociable
Self-confident (13%) : Self-confident, quality-conscious, not-extravagant, young and well educated, owner-occupiers, average income
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29. Taylor Nelson’s Monitor
Self-explorer: youthful, independent, tolerant,comfortably situated, often female
Social register: older, resist change, high need for control
Experimentalist: independent, unconventional, energetic, work-oriented, often men in their late 20s and early 30s
Conspicuous consumer: conformist, materialistic, lacking self-confidence
Belonger: mature, stable, settled
Survivor: dependent on protection of authority but sceptical of its intentions, identify with country and family, tend to be male, unskilled or skilled manual workers
Aimless: goal-less, uninvolved, alienated, unable to improve their position
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30. SAGACITY a combination of Life Style + Occupation + Income
SAGACITY combines a number of demographic variables to produce 12 segments of consumers ‘at a similar stage of their (family) life cycle, and with similar disposable income and cultural characteristics’.
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31. SAGACITY classification scheme
Dependent
Pre-family
Family
Late
Better off
Better off
Worse off
Worse off
Blue
Blue
White
White
White
Blue
White
Blue
White
Blue
White
Blue
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32. Requirements for a usable segment
The useful segment must be:
Definable
Sizeable
Reachable
Relevant
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33. Definable To be able to describe the main characteristics
A degree of homogeneity (in a heterogeneous market)
To be able to measure it’s size and define the boundaries
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34. Sizeable
To be big enough to make possible to achieve the required turnover and profit
A trend to grow
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35. Reachable
There must be a way of reaching the segment both effectively and efficiently
Marketing communication
Distribution channels
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36. Relevant Segment life cycle (durability)
Price level to customization costs (incl. entry investment)
Extent of overlap or interdependency with other segments
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37. Segmentation for organizational markets
Demographics for organizational markets include:
Geographic location (some businesses are regionally concentrated)
Primary business of industry (SIC)
Size (number of employees or sales)
Type of buying situation (tenders)
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38. Organizational market
Macrosegment 1
(large companies)
Macrosegment 2
(medium-sized
companies)
Macrosegment 3
(small companies)
Microsegment 1
1st criterion:
Reliability
Microsegment 2
1st criterion:
Convenience
Microsegment 3
1st criterion: Price
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39. Organizational segmentation
Macrosegmentation
Organizational
size
Industry
Geographic
location
Microsegmentation
Choice
criteria
Decision-
Making
structure
Decision-
Making
process
Buy
class
Purchasing
organization
Innovativeness
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40. SIC Food, drink and tobacco manufacturing : code 4.2
Soft drinks: code 42.8
Mineral waters and soft drinks (carbonated and stiff) : code
Fruit and vegetable juices : code
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41. To segment or not to segment ?
Factor
Mass
Niche
End user wants
Similar
Different
Product market size
Small
Large
Product market structure
Simple
Complex
Market share
High
Low
Resources of company
Image
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42. Segmentation strategies Targeting
Marketing
mix
Market
Mass (undifferentiated) marketing
Marketing mix 1
Segment 1
Differentiated marketing (multi-segment)
Marketing mix 2
Segment 2
Marketing mix 3
Segment 3
Segment 1
Marketing mix
Concentrated marketing
Segment 2
Segment 3
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43. Analysis of customer behaviour
2 major theories:
Rational customer who always seeks to maximize his satisfaction or utility
Psycho-socio customer: family, culture affects

44. Targeting
What does it mean?

45. Product Positioning

46. Different options need different strategies
Target segments
Customer behavior
Product adaptation
Marketing budget
Different marketing options & strategies
Segment 1
Mktg Mix 1
(Strategy 1)
Segment 1
Mktg Mix 2
(Strategy 2)
Segment 3

47. Market positioning
A products’ position is the place the product occupies in consumers’ minds relative to competitors.
Market positioning is arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers.
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48. Key tasks in positioning
Positioning is the choice of :
Target market : where we want to compete
Differential advantage : how we wish to compete
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49. Some basis for positioning
Corporate positioning
Product positioning
The organization could strive to attain and to maintain leadership in terms of one or more of:
The product’s positioning might emphasize:
market share
cost/economy/value
quality
product features
service
product range
technology
product quality
innovation
services/customer care
variety
customer types
integrity
customer problem solved
community service
use/application type
disassociation
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50. Keys to successful positioning
Clarity
Consistency
Successful
positioning
Credibility
Competiti-
veness
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51. Clarity
The positioning idea must be clear in terms of both target market and differential advantage:
BMW : The Ultimate Driving Machine
Mars : Good Food Costs Less at Sainsbury
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52. Consistency Consistent message is required.
Too many messages bombard the customers.
Consistent message is required.
If it is quality this year, it must be quality next year too.
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53. Credibility
The differential advantage which is chosen must be credible in the minds of the target customers
Example: The ad of Lada as an exiting, sporty car by showing it slaloming through dirt tracks in Africa failed – a lack of consonance between image and reality.
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54. Competitiveness
The differential advantage should have a competitive edge. It should offer something of value to the customer which the competition is failing to provide.
Example: Apple iPhone, iPad
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55. Positioning map Excellent image Amstel Kamenitza Zagorka
Low Brand Awareness
High Brand Awareness
Pirinsko pivo
Ariana
Poor image
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56. How do we position the product?

57. Marketing mix Product Price Place Promotion Marketing mix
Quality, Features, Options, Style,
Brand name, Packaging, Sizes, Warranties
Product
List price, Discounts,
Allowances, Payment
Terms, Credit terms
Marketing
mix
Price
Target market
Channels, Locations,
Inventory, Transport
Place
Promotion
Advertising, Personal selling, Sales, Promotion, PR

58. 7P of Customer Service & Mktg Mix
Price
Promotion
Physical
Evidence
Processes
People
Place
Product
Source: Adapted from Christopher, M., Payne, A. and Ballantyne, D. (1991) Relationship Marketing. Oxford: Butterworth Heinemann

59. How do we position the brand?