Market Segmentation, Targeting, and Positioningfor Competitive Advantage
Steps in Segmentation, Targeting, and PositioningSteps in Segmentation, Targeting, and Positioning
1. Identify Basesfor Segmenting the Market
2. Develop Profilesof Resulting Segments
3. Develop Measuresof Segment Attractiveness
4. Select TargetSegment(s)
5. Develop Positioningfor Each Target Segment
6. Develop MarketingMix for Each Target Segment Market
Positioning
MarketTargeting
Market Segmentation
Step 1. Market SegmentationLevels of Market SegmentationStep 1. Market SegmentationLevels of Market Segmentation
Mass MarketingSame product to all consumers
(no segmentation)
Mass MarketingSame product to all consumers
(no segmentation)
Segment MarketingDifferent products to one or more segments
(some segmentation)
Segment MarketingDifferent products to one or more segments
(some segmentation)
MicromarketingProducts to suit the tastes of individuals or locations
(complete segmentation)
MicromarketingProducts to suit the tastes of individuals or locations
(complete segmentation)
Niche MarketingDifferent products to subgroups within segments
( more segmentation)
Niche MarketingDifferent products to subgroups within segments
( more segmentation)
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P&G - Laundry DetergentP&G - Laundry Detergent
What do I want from my Detergent?
• Economy• Bleaching Power• Perfumed• Softener• Stain remover• Strength or mildness
• I may have particular expectations from a product
• may have different priorities for the benefits
• May want a different combination of these benefits
Segment marketing-Isolating broad segments that make up a market and adapting
the marketing offer to match the needs of one or more segments
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8 P&G detergent brands for different segments8 P&G detergent brands for different segments
Tide All purpose detergent, tough on grease stains.
Cheer Color expert, guards against fading, color transfer
Bold Built in fabric softener
Gain Enzyme detergent, very clean
Era Built in stain removers
Dreft Paediatrician recommended, tough baby stains
Febreze Removes odours
Ivory Snow Pure, cleans fine washables, baby clothes
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Narrow niches for brand ‘Tide’Narrow niches for brand ‘Tide’Tide with Bleach “keeps your whites white and your colors
bright”
Tide Clean rinse “goes beyond stain removal to prevent dingy buildup on clothes”
Tide Mountain spring “fresh clean scent of great outdoors”
Tide High efficiency “formulated for high efficiency and top loading machines”
Tide Free “stain removal benefits without dyes and perfumes”
Tide Wear Care “prevents damage to cotton clothes, so they last longer”
Tide Rapid Action Tablets
Portable and powerful
Niche marketing-Focussing on subsegments or niches with
distinctive traits that may seek a special combination of benefits
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MICRO MARKETING:
practice of tailoring products and marketing programs to suit the tastes of specific individuals and locations.
• LOCAL MARKETING: tailoring brands and promotion to the needs and wants of local consumer groups-cities, specific stores etc.
• INDIVIDUAL MARKETING: often termed as one-to-one marketing. Mass customization is the process through which the firms interact one-to-one with masses of customers to create customer unique value.
Step 1. Market SegmentationBases for Segmenting Consumer Markets
Step 1. Market SegmentationBases for Segmenting Consumer Markets
Geographic
DemographicAge, gender, family size and life cycle, or income
PsychographicSocial class, lifestyle, or personality
BehavioralOccasions, benefits, uses, or responses
Nations, states, regions or cities
Using Multiple SegmentationBases: Geo demographicsUsing Multiple SegmentationBases: Geo demographics
Step 1. Market SegmentationBases for Segmenting Business Markets
Step 1. Market SegmentationBases for Segmenting Business Markets
Basesfor Segmenting
BusinessMarkets
Basesfor Segmenting
BusinessMarkets
DemographicsPersonalCharacteristics
SituationalFactors
OperatingCharacteristics
PurchasingApproaches
Step 1. Market SegmentationBases for Segmenting International Markets
Step 1. Market SegmentationBases for Segmenting International Markets
Political/Legal
Political/Legal
Cultural Cultural Inter marketEg. Mercedes and Mtv
Inter marketEg. Mercedes and Mtv
Economic EconomicGeographicGeographic
Industrial MarketsIndustrial Markets
Step 1. Market SegmentationRequirements for Effective Segmentation
Step 1. Market SegmentationRequirements for Effective Segmentation
• Size, purchasing power, profiles of segments can be measured.
• Segments must be effectively reached and served.
• Segments must be large or profitable enough to serve.
Measurable Measurable
AccessibleAccessible
SubstantialSubstantial
DifferentialDifferential
ActionableActionable
• Segments must respond differently to different marketing mix elements & actions.
• Must be able to attract and serve the segments.
Step 2. Market Targeting- Evaluating Market SegmentsStep 2. Market Targeting- Evaluating Market Segments
• Segment Size and GrowthSegment Size and Growth
– Analyze sales, growth rates and expected profitability.
• Segment Structural AttractivenessSegment Structural Attractiveness
– Consider effects of: Competitors-segment less attractive if has aggressive competitors.
– Availability of actual and potential Substitute Products.
– The Power of Buyers-buyers with strong bargaining power relative to sellers forces to bring the prices down.
– Suppliers-segment less attractive if it has powerful suppliers who can control prices and quantity.
• Company Objectives and ResourcesCompany Objectives and Resources
– Company skills & resources relative to the segment (s).
– Look for Competitive Advantages.
Step 2. Market TargetingMarket Coverage Strategies
Step 2. Market TargetingMarket Coverage Strategies
Segment 1Segment 1
Segment 2Segment 2
Segment 3Segment 3
Segment 1Segment 1
Segment 2Segment 2
Segment 3Segment 3
CompanyMarketing
Mix
CompanyMarketing
Mix
CompanyMarketing
Mix
CompanyMarketing
Mix
CompanyMarketing Mix 1
CompanyMarketing Mix 1
CompanyMarketing Mix 2
CompanyMarketing Mix 2
CompanyMarketing Mix 3
CompanyMarketing Mix 3
MarketMarket
A. Undifferentiated Marketing or mass marketing strategy
B. Differentiated Marketing or segmented marketing strategy
C. Concentrated Marketing or niche marketing strategy
Step 2. Market TargetingChoosing a Market-Coverage Strategy
Step 2. Market TargetingChoosing a Market-Coverage Strategy
Company Resources
ProductVariability
Product’s Stagein the Product Life Cycle
Market Variability
Competitors’Marketing Strategies
Step 3. Positioning for Competitive AdvantageStep 3. Positioning for Competitive Advantage
PositioningPositioning• how your target market defines you in relation to your
competitors. • the place the product occupies in consumers’ minds
relative to competing products; i.e. Volvo positions on “safety”.
• technique by which marketers try to create an image or identity in the minds of their target market for its product, brand, or organization. It is the 'relative competitive comparison' their product occupies in a given market as perceived by the target market.
Positioning concepts• More generally, there are three types of positioning
concepts:• Functional positions
– Solve problems – Provide benefits to customers – Get favorable perception by investors and lenders
• Symbolic positions – Self-image enhancement – Ego identification – Belongingness and social meaningfulness – Affective fulfillment
• Experiential positions – Provide sensory stimulation – Provide cognitive stimulation
More
for
more
More
For the
same
More
for
less
The same
For
less
Less for
Much
less
MORE THE SAME LESS
MORE
SAME
LESS
POSSIBLE VALUE PROPOSITIONS
Step 3. Positioning for Competitive Advantage: StrategiesStep 3. Positioning for Competitive Advantage: Strategies
Against aCompetitor
Against aCompetitor
UsageOccasions
UsageOccasions
Away fromCompetitors
Away fromCompetitors
ProductAttributes
ProductAttributes
ProductClass
ProductClass
BenefitsOffered
BenefitsOffered
UsersUsers
BB
AA
EEDD
CCHHGG
FF
Steps to Choosing and Implementing a Positioning Strategy
Steps to Choosing and Implementing a Positioning Strategy
• Step 1. Identifying a set of possible competitive advantages: Competitive Differentiation.
• Step 2. Selecting the right competitive advantage.
• Step 3. Effectively communicating and delivering the chosen position to the market.
Developing Competitive DifferentiationDeveloping Competitive Differentiation
ProductProduct ServiceService
PersonnelPersonnel ImageImage
Areas for CompetitiveDifferentiation
Areas for CompetitiveDifferentiation
Selecting the Right CompetitiveAdvantagesSelecting the Right CompetitiveAdvantages
Criteriafor
DeterminingWhich
Differencesto
PromoteAffordableAffordable SuperiorSuperior
ProfitableProfitable
PreemptivePreemptive
DistinctiveDistinctive
ImportantImportant
CommunicableCommunicable