CHAPTER 4 MARKET SEGMENTATION, TARGETING AND POSITIONING

part two: making sense of markets

an opening challenge

You are the marketing director of a loss-making brewery. You need to develop new products to revitalise the business but you do not have the resources to launch a full range. How will you choose what type of beer to sell and to whom?

agenda

• market selection• market segmentation• targeting strategies• positioning

market attractiveness

• market opportunity • competitive advantage• the objectives of the organisation

segmentation, targeting and positioning

market segmentation

targeting

positioning

market segmentation and targeting: why do

it?

• many markets are demand-driven• consumers and customers are more

demanding• few mass markets remain– markets are fragmenting

what is market segmentation?

‘the process of dividing a total market into subgroups (segments) such that each segment consists of buyers and users who share similar characteristics but are different from those in the other segments’ (Masterson and Pickton, 2014)

criteria for determining good market segments

• measurable• homogeneous• heterogeneous• substantial• accessible• operational

consumer segmentation bases

• demographic– socio-economic or social grading

• geographic• geo-demographic• psychographic• mediagraphic• behavioural

life-stage segments (BRMB-TGI)

• fledglings• flown the nest• nest builders• mid-life dependents• unconstrained couples• playschool parents• primary school parents

• secondary school parents• hotel parents• senior sole decision

makers• empty nesters• non-standard families• unclassified

examples of behavioural

segmentation bases• purchase occasion• benefits sought• usage rate• user status• readiness stage• attitude to product• involvement• adopter type• loyalty status

using multiple segmentation variablesAQ – re-set figure type

organisational segmentation bases

• macro-segmentation– geographic– type of organisation– industry grouping/business sector– customer size

organisational segmentation bases

• micro-segmentation– user status– trade category– benefits sought– loyalty status– readiness stage– adopter type– purchasing practices– buy class

nested approach to B2B market segmentation

AQ – re-set figure type

target marketing (targeting)

‘the selection of one or more market segments towards which marketing efforts can be directed’ (Masterson and Pickton, 2014, glossary)

targeting strategiesAQ – re-set figure type

evaluating a segment for targeting

• sufficient current and potential sales/profits?• potential for sufficient future growth?• not over-competitive?• no excessive barriers to entry or exit?• unsatisfied needs that the company can serve

well?

positioning

‘the place a brand is perceived to occupy in the minds of the target market relative to other competing brands’ (Masterson and Pickton, 2010: 148)

multi-attribute mappingAQ – re-set figure type

perceptual mappingAQ – re-set figure type

positioning strategies

• attributes/product features• price/quality• usage occasions• benefits or needs• user• competitive– against another brand– a different product class

re-positioninge.g. McDonalds have been trying to move to a healthierposition in people’s perceptions

(photo courtesy of Dave Pickton)

five-stage processidentify the total market

identify market segments

select target market segment(s)

establish competitors’ positions

establish own position

summary

• markets are people, not products• products should be targeted at specific

market groups (segments)– use multi-variable segmentation– opportunities for differentiation

• develop clear positioning

reference

Masterson, R. and Pickton, D. (2014) Marketing: An Introduction, 3rd edn. London: SAGE.