0. Suhel Khan Oxford College ofLondon
Segmentation, Targeting, and Positioning Building the Right Relationships with the Right Customers
Suhel Khan
Oxford College ofLondon

1. Learning Goals
Learn the three steps of target marketing, market segmentation, target marketing, and market positioning
Understand the major bases for segmenting consumer and business marketing strategy
Know how companies identify attractive market segments and choose target marketing strategy
Realize how companies position their products for maximum competitive advantage in the marketplace

2. Case Study Procter & Gamble
Sells multiple brands within the same product category for a variety of products
Brands feature a different mix of benefits and appeal to different segments
Has also identified different niches within certain segments
Product modifications are useful: Tide offers seven different product formulations to serve different niches’ needs

3. Steps in market segmentation, targeting and positioning
Identify bases for segmenting the market
Develop segment profiles
Target Marketing
Develop measure of segment attractiveness
Select target segments
Market Positioning
Develop positioning for target segments
Develop a marketing mix for each segment
Goal 1: Learn the three steps of target marketing

4. Definition Market Segmentation:
Dividing a market into distinct groups with distinct needs, characteristics, or behavior who might require separate products or marketing mixes.
Goal 2: Understand the major bases for segmentation

5. Segmenting Consumer Markets
Geographical segmentation
Demographic segmentation
Most popular segmentation
Psychographic segmentation
Lifestyle, social class, and personality-based segmentation
Behavioral segmentation
Goal 2: Understand the major bases for segmentation

6. Geographic Segmentation Variables
World region or country
U.S. region
State
City
Neighborhood
City or metro size
Density
Climate
Goal 2: Understand the major bases for segmentation

7. Demographic Segmentation Variables
Age
Gender
Family size
Family life cycle
Income
Occupation
Education
Religion
Race
Generation
Nationality
Goal 2: Understand the major bases for segmentation

8. Behavioral Segmentation Variables
Occasions
Benefits
User Status
Attitude Toward the Product
User Rates
Loyalty Status
Readiness Stage
Goal 2: Understand the major bases for segmentation

9. Readiness Stages
Before a customer makes a purchase, he or she first goes through a series of stages called “buyer readiness.” According to Marc Mancini, these stages are:

10. Awareness. Before you can sell, you must make contact with those who want to purchase. Your agency should create advertising and promotional programs that’ll make your name conspicuous and will attract serious buyers.
Knowledge. Once rospective clients know your name, they begin the process of acquiring knowledge about what you can offer. Therefore, your advertising efforts should establish you as an expert — perhaps even a specialist in one or more niche areas.

11. Liking. We all tend to buy from people or companies we feel positive about. Entertaining ads, for example, will convey warmth and the “humanity” of your agency. Direct your creative efforts toward making your agency seem joyful, inviting and approachable.
Preference. Benefits statements are the key to making prospective clients prefer your agency over another. Provide target customers with reasons to do business with you.

12. Conviction. Your advertising should build the customers’ certainty that you’re the agency to call first. Client testimonials, for example, provide just the right reinforcement for the preference you’ve created.
Purchase. Once prospective clients have decided to seek you out, expert sales skills are critical to helping them make the right purchase.

13. Segmenting Business Markets
Demographic segmentation
Industry, company size, location
Operating variables
Technology, usage status, customer capabilities
Purchasing approaches
Situational factors
Urgency, specific application, size of order
Personal characteristics
Buyer-seller similarity, attitudes toward risk, loyalty
Goal 2: Understand the major bases for segmentation

14. Segmenting International Markets
Geographic segmentation
Location or region
Economic factors
Population income or level of economic development
Political and legal factors
Type / stability of government, monetary regulations, amount of bureaucracy, etc.
Cultural factors
Language, religion, values, attitudes, customs, behavioral patterns
Goal 2: Understand the major bases for segmentation

15. Requirements for Effective Segmentation
Measurable
Size, purchasing power, and profile of segment
Accessible
Can be reached and served
Substantial
Large and profitable enough to serve
Differentiable
Respond differently
Actionable
Effective programs can be developed
Goal 2: Understand the major bases for segmentation

16. Target Marketing Target Market
Consists of a set of buyers who share common needs or characteristics that the company decides to serve
Goal 3: Know how companies identify and target attractive segments

17. Target Marketing Evaluating Market Segments Segment size and growth
Segment structural attractiveness
Level of competition
Substitute products
Power of buyers
Powerful suppliers
Company objectives and resources
Goal 3: Know how companies identify and target attractive segments

18. Target Marketing Selecting Target Market Segments
Undifferentiated (mass) marketing
Differentiated (segmented) marketing
Concentrated (niche) marketing
Micromarketing (local or individual)
Goal 3: Know how companies identify and target attractive segments

19. Choosing a Target Marketing Strategy
Considerations include:
Company resources
The degree of product variability
Product’s life-cycle stage
Market variability
Competitors’ marketing strategies
Goal 3: Know how companies identify and target attractive segments

20. Target Marketing Socially Responsible Targeting
Some segments, especially children, are at special risk
Many potential abuses on the Internet, including fraud Internet shoppers
Controversy occurs when the methods used are questionable
Goal 3: Know how companies identify and target attractive segments

21. Positioning Positioning:
The place the product occupies in consumers’ minds relative to competing products.
Typically defined by consumers on the basis of important attributes.
Involves implanting the brand’s unique benefits and differentiation in the customer’s mind.
Positioning maps that plot perceptions of brands are commonly used.
Goal 4: Realize how companies position their products

22. Choosing a Positioning Strategy
Topics
Differentiation can be based on
Products
Services
Channels
People
Image
Identifying possible competitive advantages
Choosing the right competitive advantage
Choosing a positioning strategy
Goal 4: Realize how companies position their products

23. Market Segmentation Topics Identifying possible competitive advantages
How many differences to promote?
Unique selling proposition
Several benefits
Which differences to promote? Criteria include:
Important
Distinctive
Superior
Communicable
Preemptive
Affordable
Profitable
Identifying possible competitive advantages
Choosing the right competitive advantage
Choosing a positioning strategy
Goal 4: Realize how companies position their products

24. Market Segmentation Topics Identifying possible competitive advantages
Value propositions represent the full positioning of the brand
Possible value propositions:
More for More
More for the Same
More for Less
The Same for Less
Less for Much Less
Identifying possible competitive advantages
Choosing the right competitive advantage
Choosing a positioning strategy
Goal 4: Realize how companies position their products

25. Developing a Positioning Statement
Positioning statements summarize the company or brand positioning
EXAMPLE: To (target segment and need) our (brand) is (concept) that (point-of-difference)
Goal 4: Realize how companies position their products

26. Communicating the Positioning
Companies must be certain to DELIVER their value propositions.
Positions must be monitored and adapted over time.
Goal 4: Realize how companies position their products