1. Segmentation, Targeting & Positioning
To understand different types of market segmentation
To identify the value of niche and mass marketing

2. Segmentation, targeting and positioning
Step 1: segment the market into groups of customers with similar characteristics
Step 2: decide on what segment of the market to target
Step 3: position the product on the market by identifying how it will be viewed in relation to its competitors
Segmentation Targeting Positioning

3. *What is Market Segmentation?
Market segmentation involves dividing a market into parts that reflect different customer needs and wants

4. Market Segmentation
Segment C
Segment B
Segment D
Segment A

5. Main Categories of Market Segment
Demographic Segments
Geographic Segments
Income Segments
Behavioural Segments

6. Market Segments SEGMENT BASIS SUMMARY DEMOGRAPHIC
Dividing a market into segments based on demographic variables such as age, gender, family lifestyle, religion, nationality ethnicity etc.
INCOME
Dividing markets into different income segments, often on the basis of social-economic grouping
BEHAVIOURAL
Dividing a market into segments based on the different ways customers use or respond to a product.
GEOGRAPHICAL
Dividing a market into different geographical units, such as nations, regions, cities or neighborhoods
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7. Demographic segmentation
Identifies subgroups of the population based on their demographic profile or characteristics
Age
Gender
Level of education
Race
Religion
Family size
Stage in life e.g. empty nesters
Demographics looks at the social and economic characteristics of individuals and households
Was Lego correct to segment the market by gender?
Lego Friends 'not stereotypical'

8. Examples of Demographic Segmentation: Gender in Cosmetics

9. Examples of Demographic Segmentation: Age & Family Life-cycle in Holidays
Shearings’
Coach
Holidays
Center Parcs
Family Short Breaks
Club 18-30

10. Income segmentation
Identifying subgroups of the market based on their levels of income and profession
A common method uses socio-economic groupings
A – Higher managerial such as chief executives and directors
B – Intermediate managerial such as solicitors, accountants and doctors
C1 – Supervisory, clerical or junior professional such as teachers and junior managers
C2 – Skilled manual such as plumbers, electricians and carpenters
D – Semi and unskilled workers such as refuse collectors and window cleaners
E - Pensioners, casual workers, students and unemployed
Visit the Ford website – select 3 models of cars explain which socio economic group each car would suit.

11. Examples of Income Segmentation: Consumer Income in Retailing

12. Examples of Behavioural Segmentation: Demand Stimulated by Occasions

13. Examples of Behavioural Segmentation: New & Loyal Customers

14. Geographic segmentation
Geographic segmentation defines market categories based on where people live e.g. regions, cities or neighbourhoods
People in different geographical areas display different characteristics and needs e.g.
The South East of England is generally warmer than Scotland
Tastes and traditions vary between countries
Infrastructure in rural areas will differ from that of cities
How McDonald's conquered India
How has McDonald’s had to reposition its products to meet the needs of the Indian market?

15. Examples of Geographic Segmentation: Localisation by Multinationals
KFC in
CHINA
Starbucks in
INDIA

16. *What is a Target Market?
A target market is the set of customers sharing common needs and wants that a business decides to target

17. Targeting
Targeting is the process of deciding which segment of the market to focus on
This will be influenced by:
Mission and objectives
Perceived level of demand
Degree of competition
Nature of the product
Understanding of the needs and wants of a specific segment

18. *Niche and Mass Marketing
Niche Marketing
Where a business targets a smaller segment of a larger market, where customers have specific needs and wants
Mass Marketing
Where a business sells into the largest part of the market, where there are many similar products offered by competitors
Niche marketing may give a business first mover advantage and allow them to charge a premium price
Mass marketing can give a business a high volume of sales but often at a low price

19. Why Target a Niche Market Segment?
Advantages
Drawbacks
Less competition - a “big fish in a small pond”
Clear focus - target particular customers
Builds up specialist skill and knowledge
Can often charge a higher price
Profit margins often higher
Customers tend to be more loyal
Lack of economies of scale
Risk of over dependence on a single product or market
Likely to attract competition if successful
Vulnerable to market changes – all “eggs in one basket”

20. Key Features of a Mass Market
Customers form the majority in the market
Customer needs and wants are more “general” & less “specific”
Associated with higher production output and capacity + potential for economies of scale
Success usually associated with low-cost (highly efficient) operation or market leading brands

21. Should chocolate makers be targeting a niche or a mass market?
The sticky dilemma facing chocolate firms

22. Positioning
Where a product is placed in the market relative to its competitors
How can market mapping be used to help position a business or product in the market?

23. MARKETING MIX Marketing Mix – the 7Ps Product Promotion Place People
Process
Physical evidence
Price

24. Marketing mix Product? Price? Promotion? Place?
Create a PowerPoint presentation on your new product and ensure you cover all elements of the marketing mix! Explain why you made each of your decisions.