Instructor: Amir Ekhlassi (4) Market Segmentation, Targeting, & Positioning

STP Process Market Segmentation: Dividing a market into smaller groups of buyers with distinct needs, characteristics, or behaviors who might require separate products or marketing mixes. Market Targeting: the process of evaluating each market segment’s attractiveness and selecting one or more segments to enter. Market positioning: arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers. 2 ©Compiled by: Amir Ekhlassi

Market segmentation Levels of Market segmentation Mass marketing (same product, same way to all customers) Segment marketing (efficiency, effectiveness, less competition) Niche marketing (segment subgroup) Micro marketing (no economies of scale, logistics problems, brand overall image dilute) Local marketing Individual marketing 3 ©Compiled by: Amir Ekhlassi

Major segmentation variables for consumer markets Geographic Demographic Psychographic Behavioral 4 ©Compiled by: Amir Ekhlassi

Geographic segmentation Dividing a market into different geographical units such as nations, states, regions, counties, cities, or neighborhoods. World region or country Country region City or metro size (under 5000, above 5000) Density (Urban, Suburban, Rural) Climate (Northern, southern) 5 ©Compiled by: Amir Ekhlassi

Demographic segmentation Dividing the market into groups based on demographic variables such as age, sex, family size, family life-cycle, income, occupation, education, religion, race, and nationality Age Gender (cosmetics, clothing, cars) Family size Family life cycle Income Occupation Education Religion Race Generation Nationality 6 ©Compiled by: Amir Ekhlassi

Demographic segmentation(cont’d) Note: Note: marketers must be cautious about segmenting consumers based on their actual age. People’s behavior, affect, and cognitions are more related to their psychological age than to their chronological age. This suggest marketers should analyze subjective or cognitive age (the age one thinks of oneself as being) rather than chronological or actual age. 7 ©Compiled by: Amir Ekhlassi

Psychographic segmentation Dividing a market into different groups based on social class, lifestyle, or personality characteristics. Social class Lifestyle Personality 8 ©Compiled by: Amir Ekhlassi

Behavioral segmentation Dividing a market into groups based on consumer knowledge, attitude, use, or response to a product. Occasions (regular, special) Benefits User status (non-user, ex-user, potential user, first time user, regular user) User rates (light, medium, heavy) Loyalty status (none, medium, strong, absolute) Readiness stage (unaware, aware, informed, interested, desirous) Attitude toward product (enthusiastic, positive, indifferent, negative, hostile) 9 ©Compiled by: Amir Ekhlassi

Multiple segmentation bases Marketers rarely limit their segmentation analysis to only one or a few variables. Rather, they are increasingly using multiple segmentation bases in an effort to identify smaller, better-defined target groups. “ geodemographic” One good example of multivariable is “ geodemographic” segmentation. PRIZM system: segmenting America’s neighborhoods 10 ©Compiled by: Amir Ekhlassi

Requirements for effective segmentation Measurable Accessible Substantial Differentiable Actionable 11 ©Compiled by: Amir Ekhlassi

Selecting market segments ( A target market) A target market A target market consists of a set of buyers who share common needs or characteristics that the company decides to serve. There are three market-coverage strategies: Undifferentiated marketing Differentiated marketing Concentrated marketing 12 ©Compiled by: Amir Ekhlassi

Choosing a market-coverage strategy Company resource Product variability Product Life-cycle stage Market variability Competitor’s marketing strategy 13 ©Compiled by: Amir Ekhlassi

Positioning for competitive advantage A product’s position: A product’s position: is the way the product is defined by consumers on important attributes – the place the product occupies in consumer’s minds relative to competing products. Positioning involves implanting the brand’s unique benefits and differentiation in customer’s minds. 14 ©Compiled by: Amir Ekhlassi

Choosing a positioning strategy The positioning strategy consists of three steps: Identifying a set of possible competitive advantages upon which to build a position Choosing the right competitive advantages Selecting an overall positioning strategy 15 ©Compiled by: Amir Ekhlassi

Which differences to promote? Important Distinctive Superior Communicable Preemptive Affordable Profitable 16 ©Compiled by: Amir Ekhlassi

More for more More for the same More for less The same for less Less for much less Possible value propositions more The same less moreThe sameless price benefit 17 ©Compiled by: Amir Ekhlassi

کلام آخر نخستین بار گفتش کز کجایی؟ بگفت: از دار ملک آشنایی بگفت: آنجا به صنعت در چه کوشند؟ بگفت: انده خرند و جان فروشند بگفتا: جان فروشی در ادب نیست بگفت: از عشق بازان این عجب نیست 18

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