Chapter Eight: Segmentation, Targeting, and Positioning

Once the target market was identified, Unilever had to convince the targeted group that when it comes
to hair care products, their choice should be Sunsilk. It is achieving this task by defining the marketing
mix variables so that the target customers have a clear, distinctive, desirable understanding of what the
product or services do or represent, relative to competing products. To achieve its marketing
positioning, Unilever designed a life-style advertising campaign that has positioned Sunsilk as the choice
of women who need hairapy (therapy for hair). The idea is to get customers to recall Sunsilk at the
need recognition stage of the consumer buying process. It has also made sure that the shampoo is
available almost anywhere its customers would want to buy it.
Segmentation, Targeting, and Positioning Process
Segmentation
1. Strategy or
2. Profile
Objectives
Segments

Targeting
3. Evaluate
Segment
Attractiveness

Positioning
4. Select Target
5. Identify and
Market
Develop
Positioning
Strategy

Step 1: Establish Overall Strategy or Objectives

- the first step in the planning process is to articulate the vision/objectives of a companys marketing
strategy clearly
- the segmentation strategy must then be consistent with and derived from the firms mission and
objectives, as well as its current situation SWOT
- Unilevers objective is to increase sales in a competitive industry
- the company recognized its strengths were globally recognized brand name and ability to place new
products on retailers shelves

Step 2: Profile Segments

- describe the different segments (needs, wants and characteristics) which helps firms better understand
the profile of the customers in each segment, as well as the customer similarities within a segment and
dissimilarities across segments
- segmentation in the soft drink industry includes caffeinated/decaffeinated, regular/diet
- this segmentation method is based on the benefits that consumers derive from the products

Methods for Segmenting Markets

Segmentation Method
a) Geographic

b) Demographic
c) Psychographic

d) Behavioural

Sample Segments
Country, region, province, city, urban, rural
Continent: N America, Asia, Europe, Africa
Within US: Pacific, mountain, central, south
Age, gender, income, education, occupation, race,
marital status, family size, religion, ethnicity
Personality (innovators, achievers, believers),
Lifestyle (conservative, liberal, outgoing) and Social
Class (upper, middle and working class)
Benefits sought (convenience, economy, prestige,
quality, speed), Usage (heavy, moderate, light) and
Loyalty (not loyal, somewhat loyal, completely
loyal)

Psychographics delves into how consumers describe themselves; allows people to describe
themselves using those characteristics that help them choose how they occupy their time (behaviour)
and what underlying psychological reasons determine those choices
Determining psychographics involves knowing and understanding three components:
a) Self-Values goals for life, not just the gaols one wants to accomplish in a day
- refers to overriding desires that drive how a person lives his/her life
b) Self-Concept the image a person has of him/herself
c) Lifestyles refers to the way a person lives his/her life to achieve goals
The most widely used psychographic system is the VALS, which classifies consumers into eight
segments:
- innovators
- experiencers
- thinkers
- makers
- believers
- survivors
- achievers
- strivers
See pages 210-211 for the framework and description of VATS categories.
Behavioural Segmentation group of consumers based on the benefits they derive from products or
services, from usage rate, their user status, and their loyalty
Benefit Segmentation the grouping of consumers on the basis of the benefits they derive from
products or services

Loyalty Segmentation strategy of investing in loyalty initiatives to retain the firms most profitable
customers
Geodemographic Segmentation the grouping of consumers on the basis of a combination of
geographic, demographic and lifestyle characteristics
PSYTE Clusters the grouping of all neighbourhoods in Canada into 60 different lifestyles clusters

Step 3: Evaluate Segment Attractiveness

The third step in the segmentation process involves evaluating the attractiveness of the various
segments.
Evaluation of Segment Attractiveness
a) Identifiable
b) Reachable
c) Responsive
d) Substantial and Profitable
Step 4: Select Target Market
Segmentation Strategies
a) Mass or Undifferentiated
- a marketing strategy a firm can use if the product or service is perceived to provide the same benefits
to everyone, with no need to develop separate strategies for different groups
b) Differentiated
- a strategy through which a firm targets several market segments with a different offering for each
c) Concentrated
- a strategy of selecting a single, primary target market and focusing all energies on providing a product
to fit that markets needs
d) Micromarketing One-to-One
- an extreme form of segmentation that tailors a product or service to suit an individual customers
wants or needs
Firms that interact on a one-to-one basis with many people to create custom-made products/services
are engaged in mass customization. This is the practice of interacting with many people individually to
create custom-made products or services; providing one-to-one marketing to the masses.
Step 5: Identify and Develop Positioning Strategy
The last step in developing a market segmentation strategy is positioning.

Positioning the mental picture that people have about a company and its products or services relative
to competitors
Positioning Statement expresses how a company wants to perceived by consumers
Firms Position Their Products/Services According To:
a) Value
- relationship of price of quality
b) Product Attributes - focuses on the attributes of the product most important to the target market
c) Benefits and Symbolism emphasises the benefits of the brand as well as the psychological meaning
of the brand to consumers
d) Competition
- firms can position their products/services head-to-head against a specific
competitor or an entire/product/service classification
e) Market Leadership -companies may emphasize their leadership position within their industry
Positioning Stages
- when developing a positioning strategy, firms go through 5 important stages
- a perceptual map displays, in two or more dimensions, the position of products or brands in the
consumers mind
- the position of each brand is denoted by a small circle, and the numbered asterisks denote the
consumers ideal points where a particular market segments ideal product would lie on the map
To derive a perceptual map, marketers follow five steps: (see page 227)
1. Determine consumers perceptions and evaluations of the product or service in relation to
competitors
2. Identify competitors positions
3. Determine consumer preferences
4. Selection the position
5. Monitor the positioning strategy
Repositioning sometimes firms try to change their positioning
Cadbury repositioned from a leading brand for older customers to a brand for a younger target market
because customer loyalty among its older customers have been dropping. To do this, Cadbury refreshed
its brand by updating the look of its packaging, displays, and marketing communications to portray a
more cheerful and lively appearance. They also launched an advertising campaign that depicted the
product being enjoyed in a work environment.
Brand Repositioning (Rebranding) a strategy in which marketers change a brands focus to target new
markets or realign the brands core emphasis with changing market preferences