1. Chapter 9 Market Segmentation, Targeting, and Positioning
Principles of
Contemporary Marketing
Kurtz & Boone
Chapter 9 Market Segmentation, Targeting, and Positioning

2. Chapter Objectives Identify the essential components of a market.
Outline the role of market segmentation in developing a marketing strategy.
Describe the criteria necessary for effective segmentation.
Explain the geographic approach to segmenting consumer markets.
Discuss the demographic approach to segmenting consumer markets.
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3. Chapter Objectives
Outline the psychographic approach to segmenting consumer markets.
Describe product-related segmentation.
Identify the steps in the market segmentation process.
Discuss the four basic strategies for reaching target markets.
Summarize the types of positioning strategies, and explain the reasons for positioning and repositioning products.
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4. Types of Markets
Consumer products - Products bought by ultimate consumers for personal use
Business products - Goods and services purchased for use either directly or indirectly in the production of other goods and services for resale
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5. The Role of Market Segmentation
Marketing strategies must be adjusted to meet the needs of different consumer groups
Market segmentation - Division of the total market into smaller, relatively homogenous groups
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6. Segmenting Consumer Markets
Geographic segmentation
Demographic segmentation
Psychographic segmentation
Product-related segmentation
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7. Geographic Segmentation
Division of an overall market into homogenous groups based on their locations
Marketers look at total population, a variety of economic variables, geographic indicators, and migration patterns to determine market size
Pay close attention to areas with quickly growing populations to plan for the future
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8. Geographic Segmentation
Government now classifies urban data using several categories:
Core based statistical area (CBSA)
Metropolitan statistical area (MSA)
Micropolitan statistical area
Consolidated metropolitan statistical area (CMSA)
Primary metropolitan statistical area (PMSA)
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9. Demographic Segmentation
Division of an overall market into homogenous groups based on variables such as gender, age, income, occupation, education, sexual orientation, household size, and stage in the family life cycle
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10. Segmenting by Household Type
Average household size in U.S. has decreased from 5.8 in 1790 to less than 3 today
Households vary by lifestage and the presence or absence of children
Growing number of same-sex couples who share households
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11. Segmenting by Income and Expenditure Patterns
Engel’s laws
As household income increases:
A smaller percentage of expenditures goes for food
The percentage spent on housing, household operations, and clothing remains constant
The percentage spent on recreational and educational items increases
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12. Demographic Segmentation Abroad
One source of global demographic information is the International Programs Center (IPC) at the U.S. Census Bureau
IPC provides a searchable online database of population statistics for many countries on the Census Bureau’s Web page
Private marketing research firms can supplement government data
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13. What is Psychographic Segmentation?
Division of a population into groups that have similar attitudes, values, and lifestyles
AIO statements - Items on lifestyle surveys that describe various activities, interests, and respondents’ opinions
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14. Copyright © 2012 by South Western, a division of Cengage Learning
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15. Product-Related Segmentation
Division of a population into homogeneous groups based on their relationships to a product
Segmenting by benefits sought
Segmenting by usage rates
Segmenting by brand loyalty
Using multiple segmentation bases
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16. The Market Segmentation Process
Develop a relevant profile for each segment
Forecast market potential
Forecast probable market share
Select specific market segments
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17. Strategies for Reaching Target Markets
Undifferentiated marketing
Strategy that focuses on producing a single product and marketing it to all customers; also called mass marketing
Differentiated marketing
Strategy that focuses on producing several products and pricing, promoting, and distributing them with different marketing mixes designed to satisfy smaller segments
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18. Concentrated Marketing
Focusing marketing efforts on satisfying a single market segment; also called niche marketing
Approach can appeal to small firms or to firms that offer highly specialized goods and services
Example: Peanut Butter & Co, which appeals to peanut butter lovers
Can backfire if competitors target the same niche or if market decreases
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19. Selecting and Executing a Strategy
Basic determinants of marketing strategy:
Company resources
Product homogeneity
Stage in the product lifestyle
Competitors’ strategies
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20. Positioning
Placing a product at a certain point or location within a market in the minds of prospective buyers
Possible approaches
Attributes
Price/quality
Competitors
Application
Product user/class
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