5.Mkt SEg,Posit

7/31/2019 5.Mkt SEg,Posit

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7-1

Market Segmentation, Targeting, andPositioning for Competitive

Advantage



Steps in Market Segmentation,Targeting, and Positioning (Fig. 7-1)

Step1 Step2 Step3



Step 1. Market Segmentation Levels of Market Segmentation

Dividing Markets into Smaller Segments that Can beReached More Efficiently And Effectively With Products

and Services That Match Their Unique Needs.

Mass MarketingSame product to all consumers

(no segmentation, i.e Coca-Cola at one time)

Segment MarketingDifferent products to one or more segments

(some segmentation, i.e. Marriott)



Niche MarketingDifferent products to subgroups within segments

(more segmentation, i.e. Standard or Luxury SUV’s)

MicromarketingProducts to suit the tastes of individuals and locations

(complete segmentation)

Step 1. Market Segmentation Levels of Market Segmentation

Local Marketing

Tailoring brands/promotions tolocal customer groups, i.e

Sears

Individual Marketing

Tailoring products andprograms to the needs of

individual customers, i.e. Dell



Density or Climate

City or Metro Size

World Region or Country

Step 1. Market Segmentation

Geographic Segmentation



Step 1. Market Segmentation Demographic Segmentation

Dividing the market intogroups based on variablessuch as:

Age

Life-cycle stage or family size

Gender

Income

Occupation

Education

Religion

Race

Nationality



Step 1. Market Segmentation Psychographic Segmentation

Divides Buyers Into Different Groups Based On:



Step 1. Market Segmentation Behavioral Segmentation

Dividing the market intogroups based on variables

such as:Occasions

Benefits sought

User statusUsage rate

Loyalty status



Operating Characteristics

Purchasing Approaches

Situational Factors

Personal Characteristics

Segmenting Business Markets

Business

Marketers UseMany of the

Same Consumer Variables, Plus:

S i I i l



Factors Usedto SegmentInternational

Markets

Geographic

Location

Economic

Factors

Political and

Legal Factors

Cultural

Factors

Segmenting International Markets



Step 1. Market Segmentation Requirements for Effective Segmentation

Measurable: size,

purchasing power, and

profiles of segmentscan be measured.

Accessible: segments

can be effectively

reached and served.Substantial: segments

are large or profitableenough to serve.

Differential: segmentsare conceptually

distinguishable andrespond differently todifferent marketing mixelements and programs.

Actionable: effective

programs can bedesigned for attractingand serving thesegments.



Step 2. Market Targeting Evaluating Market Segments

Segment Size and Growth

Analyze current segment sales, growth rates, and expected

profitability for various segments.

Segment Structural Attractiveness

Consider effects of: competitors, availability of substituteproducts, and the power of buyers & suppliers.

Company Objectives and Resources

Examine company skills & resources needed to succeed inthat segment(s).

Offer superior value & gain advantages over competitors.



Step 2. Selecting Market Segments Market Coverage Strategies (Fig. 7-3)



Company Resources

Product Variability

Product’s Life-Cycle Stage

Market Variability

Competitors’ Marketing Strategies

Step 2. Selecting Market Segments Choosing a Market-Coverage Strategy



Socially Responsible Target Marketing

Smart targeting helps companies andconsumers alike.

Target marketing sometimes generatescontroversy and concern.

Disadvantaged and vulnerable can be targeted.

Cereal, cigarette, beer, and fast-food marketershave received criticism in the past.

Internet has raised fresh concerns aboutpotential targeting abuses.



Step 3. Positioning for Competitive Advantage

Product’s Position - the way the product is definedby consumers on important attributes.

Product is compared with competing products.Simplifies the buying process by helpingconsumers organize products into categories.

Marketers must:Plan positions to give their products the greatestadvantage in selected target markets,

Design marketing mixes to create these planned

positions.



Step 3. Choosing a Positioning Strategy

Step 2. Choosing theRight Competitive

Advantage

Step 3. Communicatingand Delivering theChosen Position

Step 1. IdentifyingPossible Competitive

Advantages



Identifying Possible Competitive Advantages

Key to winning and keeping customers is tounderstand their needs and buying

processes better than competitors do anddeliver more value.

Competitive advantage – extent that a

company can position itself as providingsuperior value to selected target markets.



ServicesDifferentiation

i.e. Delivery, Installation,Repair Services, CustomerTraining Services

ProductDifferentiation

i.e. Features, Performance,Style & Design, Attributes

Identifying Possible Competitive Advantages

PeopleDifferentiation

i.e. Hiring, Training BetterPeople Than Competitors

Do

ImageDifferentiation

i.e. Symbols, Characters

ChannelDifferentiation



CriteriaFor DeterminingWhich Differences

To Promote

Affordable Superior

Profitable

Preemptive

Distinctive

Important

Communicable

Choosing the Right Competitive Advantages



Selecting an Overall Positioning Strategy (Fig. 7-4)



Communicating and Delivering the Chosen Position

Company must take strong steps to deliverand communicate the desired position to

target consumers. All the company’s marketing mix mustsupport the positioning strategy.

Positioning strategy must be monitored andadapted over time to match changes inconsumer needs and competitors’

strategies

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