1. Segmentation, Targeting and Positioning

2. Divide a market into separate groups

3. Targeting a group of customers who share a similar set of needs and wants

4. Reasons of Segmentation Identifies opportunities and needs. Allows firm to focus on specific needs. Improves marketing mix for each segment. Allows small firm to exist.

5. Segmentation Strategy 1. Determine Demand Patterns 2. Establish Possible Bases of Segmentation 3. Identify Potential Market Segments 4. Choose a Target Market Approach 5. Select the Target Market(s) 6. Position the Firm’s Offering in Relation to the Competition 7. Develop the Appropriate Marketing Mix(es) Analyze Consumer Demand Target the Market Develop the Marketing Strategy

6. Basic Market Preference Patterns

7. Segmentation Criteria Size, purchasing power, profiles of segments can be measured. Segments must be effectively reached and served. Segments must be large or profitable enough to serve. Measurable Accessible Substantial Differential Actionable Segments must respond differently to different marketing mix elements & actions. Must be able to attract and serve the segments.

8. Segmentation Variables for Consumer Markets FIGURE 7.3

9. Demographic Variables Population characteristics such as age, gender, race, ethnicity, income, education

10. Geographic Variables Customer product needs are influenced by climate, city size, population density, and urban/rural areas Market Density the number of potential customers within a unit of land area

11. Psychographic Variables Personality characteristics Marketers appeal to positive/favorable personal characteristics to influence the purchase decision. Motives Marketers use individuals’ differing purchase motives to segment a product market. Lifestyles Marketers segment markets according to how individuals choose to spend their time in various activities, their income, their interest and opinions, and their education

12. Behavioristic Variables Benefit segmentation The division of a market according to benefits that customers want from the product Individuals purchase and use products that provide them with benefits that meet their needs

13. Market Targeting Segment Size and Growth Segment Size and Growth Analyze sales, growth rates and expected profitability. Segment Structural Attractiveness Segment Structural Attractiveness Consider effects of: Competitors, Availability of Substitute Products and, the Power of Buyers & Suppliers. Company Objectives and Resources Company Objectives and Resources Company skills & resources relative to the segment(s). Look for Competitive Advantages

14. Patterns of Target Market Selection

17. Targeting Strategies Segment 1 Segment 2 Segment 3 Segment 1 Segment 2 Segment 3 Company Marketing Mix Company Marketing Mix Company Marketing Mix Company Marketing Mix Company Marketing Mix 1 Company Marketing Mix 1 Company Marketing Mix 2 Company Marketing Mix 2 Company Marketing Mix 3 Company Marketing Mix 3 Market A. Undifferentiated Marketing B. Differentiated Marketing C. Concentrated Marketing

18. Factors Affecting the Strategy Company Resources Product Variability Product’s Stage in the Product Life Cycle Market Variability Competitors’ Marketing Strategies

19. Positioning The place the product occupies in consumers’ minds relative to competing products

20. Marketers must Plan positions to give products the greatest advantage Develop marketing mixes to create planned positions

21. Positioning Strategies Against a Competitor Against a Competitor Usage Occasions Usage Occasions Away from Competitors Away from Competitors Product Attributes Product Attributes Product Class Product Class Benefits Offered Benefits Offered Users B B A A E E D D C C H H G G F F

22. Steps to Choosing Positioning Strategy 1. Identifying a set of possible competitive advantages: Competitive Differentiation 2. Selecting the right competitive advantage 3. Effectively communicating and delivering the chosen position to the market