Marketing Strategy

Segmentation Targeting Positioning

S T P
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 Chapter Questions
• What are the different levels of market
segmentation?
• How can a company divide a market into
segments?
• How should a company choose the
most attractive target markets?
• What are the requirements for effective
segmentation?

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Chapter Questions
1. How can a firm develop and establish an
effective positioning in the market?
2. How do marketers identify and analyze
competition?
3. How are brands successfully
differentiated?
4. What are the differences in positioning
and branding with a small business?

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 What is a Market Segment?
A Market Segment consists of a group of
customers who share a similar set of needs ad
wants.
The Importance of Market Segmentation
1. Markets have a variety of product needs and
preferences.
2. Marketers can better define customer needs.
3. Decision makers can define objectives and
allocate resources more accurately.
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 Segmentation Process
• Marketers follow two methods to determine
the bases on which to identify markets:
– Segments are predefined by managers
based on their observation of the
behavioral and demographic
characteristics of likely users.
– Segments are defined by asking
customers which attributes are important
and then clustering the responses

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 Steps in Segmentation Process

Needs-based segmentation

Segment identification Marketing-Mix

Segment attractiveness Strategy

Segment profitability

Segment positioning

Segment acid test

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 What is Customerization?
Customerization combines operationally
driven mass customization with
customized marketing in a way that
empowers consumers to design the
product and service offering of their
choice.

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 Segmenting Consumer Markets

Geographic

Demographic

Psychographic

Behavioral

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Demographic Segmentation

Age and Life Cycle

Life Stage
Gender
Income
Generation
Social Class

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 No Market Segmentation

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 Segmented by Gender

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 Segmented by Age

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 Behavioral Segmentation
Decision Roles Behavioral Variables
• Initiator • Occasions
• Influencer • Benefits
• User Status
• Decider
• Usage Rate
• Buyer
• Buyer-Readiness
• User
• Loyalty Status
• Attitude
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 Loyalty Status

Hard-core

Split loyals

Shifting loyals

Switchers

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Behavioral Segmentation Breakdown

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 Psychographic Segmentation
• Psychographic Segmentation:
dividing a population into groups
that have similar psychological
characteristics, and lifestyles.
Lifestyle: people’s decisions about
how to live their daily lives,
including family, job, social, and
consumer activities

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Patterns of Target Market Selection

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 Patterns of Target Market Selection

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Patterns of Target Market Selection

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Crafting the Brand Position
 Targeting

• Choosing one or more segments for

which to design your marketing
operations

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Identify the Appropriate Targeting Strategy

Undifferentiated Strategy

Differentiated

Concentrated
Undifferentiated Strategy

Single
Marketing
Mix

Organization
Target Market
 Differentiated Strategy

Marketing Mix 1

Marketing Mix 2
Organization

Target Market
Concentrated Strategy

Single
Marketing
Mix

Organization
Target Market
 STRATEGIES FOR REACHING
TARGET MARKETS
• No single, best choice strategy suits all firms
• Determinants of a market-specific strategy:

–Company resources
–Product homogeneity
–Competitors’ strategy
 Positioning
The act of designing a company’s offering and
image to occupy a distinctive place in the minds
of the target market.

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Value Proposition
What the
What the
brand
brand is
could be

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Value Proposition Examples

Company Price
Target Customers Key Benefit Value Proposition
(Product) Premium

Perdue Quality-conscious More tender golden chicken

Tenderness 10%
(chicken) consumers at a moderate price

Volvo The safest, most durable

Safety-conscious Durability
(station 20% wagon in which your family
upscale families and safety
wagons) can ride.
Delivery A good hot pizza, delivered
Domino’s Convenience-
speed and 15% promptly to your door, at a
(pizza) minded pizza lovers
good quality moderate price.

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Positioning of Procter & Gamble Detergents
Market
Brand Positioning
Share
Tide Tough, powerful cleaning 31.1%

Cheer Tough cleaning, color protection 8.2%

Bold Detergent plus fabric softener 2.9%

Gain Sunshine scent and odor-removing formula 2.6%

Era Stain treatment and stain removal 2.2%

Dash Value brand 1.8%

Oxydol Bleach-boosted formula, whitening 1.4%

Solo Detergent and fabric softener in liquid form 1.2%

Dreft Outstanding cleaning for baby clothes, safe 1.0%

LO 9
Ivory Snow Fabric & skin safety on baby clothes 0.7%

Ariel Tough cleaner, aimed at Hispanic market 0.1%

Points of Parity / Difference
Points of Parity
POP

Points of Difference
POD

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 Product Positioning Dimensions
• Product Attributes / Differences / Benefits

• Product User / Usage

• Problem Solution

• Against a Competitor / Away from Competitors

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 Perceptual Mapping
• A means of displaying or
graphing, in two or more
dimensions, the location of
products, brands, or groups of
products in customers’ minds.

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 Perceptual Maps
Corolla Celica Avalon Camry
Expensive

Sporty Conservative

Inexpensive
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Product Positioning using perceptual maps

High moisturizing
Zest
Tone 7
4
Lever 2000
Dove
5 2

Safeguard
Coast
Lux 8
Nondeodorant 3 Deodorant

1
Dial
Lifebuoy
Lava
6

Low moisturizing
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