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Segmentation, Targeting and Positioning

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1 Segmentation, Targeting and Positioning
Linking Customer Needs to Marketing Action

2 Learning Objectives After studying this chapter, you should be able to: Define the three steps of target marketing: market segmentation, target marketing, and market positioning List and discuss the bases for segmenting consumer and business markets Explain how companies identify attractive market segments and choose a market coverage strategy Discuss how companies position their products for maximum competitive advantage in the marketplace 10/29/2014 Jahanzaib Yousaf

WHO TO SERVE? 3 STEPS: Segmentation Targeting Positioning 10/29/2014 Jahanzaib Yousaf

4 STP Market segmentation: dividing market into distinct groups which will require separate marketing mixes Target marketing: choosing which group(s) to appeal to Market positioning: creating a clear, distinctive position in the consumer’s mind relative to competition 10/29/2014 Jahanzaib Yousaf

5 Consumer Market Segmentation
Geographic: Regions Size/density Climate Demographic: Age/generation Gender Family size/life-cycle Income Occupation Religion Ethnic origin Psychographic: Social class Lifestyle Personality Behavioral: Occasions Benefits User status Usage rate Loyalty status Readiness state Attitude toward product

6 Geographic Segmentation
Divide markets into different geographic units. Examples: World Region or Country: Middle East, South Asia or Pakistan, India etc. Country Region: Punjab, KPK, Sindh, etc. City or Metro Size: Lahore, Karachi. Population Density: rural, suburban, urban Climate: northern areas, southern, tropical

7 Demographic Segmentation
Use Differences in: age, gender, family size, family life cycle, income, occupation, education, race, and religion Most frequently used segmentation variable Ease of measurement and high availability.

8 Psychographic Segmentation
Psychographic segmentation divides a market into different groups based on social class, lifestyle, or personality characteristics. People in the same demographic classification often have very different lifestyles and personalities.

9 Behavioral Segmentation
Occasion Special promotions & labels for holidays. Special products for special occasions. Benefits Sought Different segments desire different benefits from the same products. Loyalty Status Nonusers, ex-users, potential users, first-time users, regular users. Usage Rate Light, medium, heavy.

10 Loyalty Status Segmentation
Hard-core Split loyals Shifting loyals Switchers

11 User & Loyalty Status Segmentation

12 Requirements for Effective Segmentation
To be useful, market segments must be: Measurable: Size, purchasing power, and profiles can be measured Accessible: Segments can be reached Substantial: Large enough to be profitable Actionable: Programs can be developed to attract and serve the segments “Lefties” are hard to identify and measure, so few firms target this segment.

13 Market Preference Patterns

14 Target Marketing Strategies

15 Undifferentiated Marketing (Mass Marketing)
Appeals to a broad spectrum of people Efficient due to economies of scale Effective when most consumers have similar needs

16 Differentiated Marketing (Segment Marketing)
Develops one or more products for each of several customer groups with different product needs Coca-Cola (Coke, Sprite, Diet Coke, etc.) Procter & Gamble (Tide, Cheer, Gain, Dreft, etc.) Toyota (Camry, Corolla, Prius, Scion, etc.)

17 Concentrated Marketing (Niche Marketing)
Entails focusing efforts on offering one or more products to a single segment Useful for smaller firms that do not have the resources to serve all markets Niches have very specialized interests

18 Micro Marketing Local Marketing
Individual Marketing (one-to-one Marketing) Segments are so precisely defined that products are offered to exactly meet the needs of each individual Example: Levi’s Original Spin (custom) jeans, hair stylists Mass customization is a related approach in which a company modifies a basic good to meet the needs of an individual Example: Proctor & Gamble’s products at Form Products to Be Sold into Groups

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

20 Positioning Example eBay’s positioning: No matter what “it” is, you can find “it” on eBay!

21 Positioning Strategy Competitive advantages Points of Parity (POP)
Points of Difference (POD) => Differentiation Positioning results from differentiation and competitive advantages. Positioning may change over time.

22 Positioning Example To (target segment and need) our (brand) is a (concept) that (point-of-difference). “To busy mobile professionals who need to always be in the loop, Blackberry is a wireless connectivity solution that allows you to stay connected to people and resources while on the go more easily and reliably than the competing technologies.”

23 Positioning Maps: Luxury SUVs Price vs. Orientation Dimensions

24 Generic Product Positions & Value Propositions

25 In-class Activity Describe how each of the following brands, companies, or products is positioned:

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