Presentation on theme: "Objectives Be able to define the three steps of target marketing: market segmentation, target marketing, and market positioning. Understand the major."— Presentation transcript:
0 Segmentation, Targeting, and Positioning Chapter 8
1 ObjectivesBe able to define the three steps of target marketing: market segmentation, target marketing, and market positioning.Understand the major bases for segmenting consumer and business markets.
2 ObjectivesKnow how companies identify attractive market segments and how they choose a target marketing strategy.Comprehend how companies position their products for maximum competitive advantage.
3 cProcter & GambleSells multiple brands within the same product category for a variety of productsBrands feature a different mix of benefits and appeal to different segmentsHas also identified different niches within certain segmentsTide offers seven different product formulations to serve different niches’ needs
4 Definition Market Segmentation: Dividing a market into distinct groups with distinct needs, characteristics, or behavior who might require separate products or marketing mixes.
5 Steps in Market Segmentation, Targeting, and Positioning Figure 8-1:Steps in Market Segmentation, Targeting, and Positioning
6 Market Segmentation Key Topics Segmenting Consumer Markets Geographical segmentationMarketing mixes are customized geographicallyDemographic segmentationPsychographic segmentationBehavioral segmentationUsing multiple segmentation variablesSegmenting Consumer MarketsSegmenting Business MarketsSegmenting International MarketsRequirements for Effective Segmentation
7 Geographic Segmentation Variables Market SegmentationGeographic Segmentation VariablesWorld Region or CountryU.S. RegionStateCityCity or Metro SizeNeighborhoodDensityClimate
8 Discussion QuestionGeographical climate is a legitimate means of segmentation for many products or services.Name several examples of products for which need (and demand) would vary on a geographical basis.
9 Market Segmentation Key Topics Segmenting Consumer Markets Geographical segmentsDemographic segmentationMost popular typeDemographics are closely related to needs, wants and usage ratesPsychographic segmentationBehavioral segmentationUsing multiple segmentation variablesSegmenting Consumer MarketsSegmenting Business MarketsSegmenting International MarketsRequirements for Effective Segmentation
20 Occasion segmentation: Altoids’ “Love Tin” is a “curiously strong valentine”
21 Checkout Direct offers retailers & manufacturers an excellent method of reaching segments of heavy users, as well as users of the direct competition.
22 Market Segmentation Key Topics Segmenting Consumer Markets Geographic segmentsDemographic segmentationPsychographic segmentationBehavioral segmentationUsing multiple segmentation variablesPrizmSegmenting Consumer MarketsSegmenting Business MarketsSegmenting International MarketsRequirements for Effective Segmentation
23 Discussion Question Visit PRIZM’s “You are where you live” website. Enter the zip code(s) of your choice.Were you surprised bywhat you found?
24 Example Market segments for J.C. Penney Conservative Size: 23% of population 16% of salesAge: years oldValues: Conservative values satisfied with present statusEmployment: Has job, or careerIncome: Limited disposable incomeBenefits sought: Price-driven, reacts to sales, wants easy care and comfort, Not interested in fashion, Defines value as Price, Quality, Fashion
25 Traditional Size: 38% of population 40% of total sales Age: years oldValues: Traditional values Active, busy, independent, self-confidentEmployment: Family-and job/career-orientedIncome: Considerable incomeBenefits sought: Wants traditional styling, seeks clothes that last, Interested in newness, Defines value as Quality, Fashion, Price
26 Update Size: 16% of population 24% of total sales Age: 25-49 Values: Contemporary values Active, busy, independent, very self-confidentEmployment: Family-and job/ career-orientedIncome: considerable incomeBenefits sought: Wants newness in color and style, Shops often, Defines value as Fashion, Quality, Price
27 Example Toothpaste Benefit segments Sensory SegmentSociable SegmentWorrier SegmentIndependent
28 Sensory SegmentPrinciple benefit sought: Flavor and product appearanceDemographic strengths: ChildrenSpecial behavior characteristics: Users of spearmint-flavored toothpasteBrands: ColgateLifestyle characteristics: Hedonistic
29 Sociable Segment Principle benefit sought: Brightness of teeth Demographic strengths: Teens, young peopleSpecial behavior characteristics: SmokersBrands: Macleans, Ultra BriteLifestyle characteristics: Active
30 Worrier Segment Principle benefit sought: Decay prevention Demographic strengths: Large FamiliesSpecial behavior characteristics: Heavy usersBrands: CrestLifestyle characteristics: Conservative
31 Independent Segment Principle benefit sought: Price Demographic strengths: MenSpecial behavior characteristics: Heavy usersBrands: Cheapest BrandLifestyle characteristics: Value oriented
32 Market Segmentation Key Topics Segmenting Consumer Markets Demographic segmentationIndustry, company size, locationOperating variablesTechnology, usage status, customer capabilitiesPurchasing approachesSituational factorsUrgency, specific application, size of orderPersonal characteristicsBuyer-seller similarity, attitudes toward risk, loyaltySegmenting Consumer MarketsSegmenting Business MarketsSegmenting International MarketsRequirements for Effective Segmentation
33 Market Segmentation Key Topics Segmenting Consumer Markets Geographic segmentationLocation or regionEconomic factorsPopulation income or level of economic developmentPolitical and legal factorsType / stability of government, monetary regulations, amount of bureaucracy, etc.Cultural factorsLanguage, religion, values, attitudes, customs, behavioral patternsSegmenting Consumer MarketsSegmenting Business MarketsSegmenting International MarketsRequirements for Effective Segmentation
34 Market Segmentation Key Topics Segmenting Consumer Markets MeasurableSize, purchasing power, and profile of segmentAccessibleCan be reached and servedSubstantialLarge and profitable enough to serveDifferentiableRespond differentlyActionableEffective programs can be developedSegmenting Consumer MarketsSegmenting Business MarketsSegmenting International MarketsRequirements for Effective Segmentation
35 Target Marketing Evaluating Market Segments Segment size and growth Segment structural attractivenessLevel of competitionSubstitute productsPower of buyersPowerful suppliersCompany objectives and resources
37 Target MarketingChoosing a Target- Marketing Strategy Requires Consideration of:Company resourcesThe degree of product variabilityProduct’s life-cycle stageMarket variabilityCompetitors’ marketing strategies
38 Target Marketing Socially Responsible Targeting Some segments are at special risk:ChildrenInner-city minority consumersInternet shoppersControversy occurs when the methods used are questionable.
39 Positioning Positioning: The place the product occupies in consumers’ minds relative to competing products.Typically defined by consumers on the basis of important attributes.
40 Positioning Choosing a Positioning Strategy: Identifying possible competitive advantages -- many potential sources of differentiation exist:ProductsServicesChannelsPeopleImage
41 Porsche is positioned on the basis of performance and freedom.
42 Positioning Choosing a Positioning Strategy: Choosing the right competitive advantageHow many differences to promote?Unique selling propositionPositioning errors to avoidWhich differences to promote?
44 Criteria for Meaningful Differences PositioningCriteria for Meaningful DifferencesImportantSuperiorPreemptiveDistinctiveCommunicableAffordableProfitable
45 Possible Value Propositions Figure 8-3:Possible Value Propositions
46 Discussion Question View the ad at right. Evaluate the level of benefits and the price.What value proposition is being expressed?
47 Positioning Choosing a Positioning Strategy: Developing a positioning statementPositioning statements summarize the company or brand positioningEXAMPLE: To (target segment and need) our (brand) is (concept) that (point-of-difference).Communicating the chosen position
48 Positioning Choosing a Positioning Strategy: Communicating and delivering the chosen positionEntire marketing mix must support the chosen strategyMay require changes to the product, pricing, distribution or promotion.
49 BusinessNow Zoots Video Clip Zoots Drycleaning has adapted its service to meet the needs of its target market and reflect its positioning.Click the picture above to play video