1. Chapter Seven Segmentation, Targeting and Positioning: Building the Right Relationships with the Right Customers
with Duane Weaver

2. Segmentation/Positioning
Segment markets.
Identify bases 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.

3. 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.

4. 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.

5. 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.

6. 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.
Chapter 7, page 263

7. 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.
Chapter 7, page

8. 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.

9. 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 Ford’s Model T is an excellent example of undifferentiated or mass marketing.

10. 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.

11. 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.

12. 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 groups—cities, neighbourhoods, specific stores.
Individual Marketing: Tailoring products and marketing programs to the needs and preferences of individual customers.

13. 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.)

14. 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.

15. 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.

16. 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).

17. 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.

18. Positioning Errors Under-positioning. Over-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.

19. Value Propositions Price Benefits More for more for the same less
Less for
much
Less
Benefits

20. 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.

21. THANKS! IT’S ALL ABOUT THE LEVERAGE…BABY!
Does Market Segmentation and Customer Positioning enable marketers to hit the right buttons;
providing differentiated value at a profit???
IT’S ALL ABOUT THE LEVERAGE…BABY!