MARKETING MANAGEMENT

12th edition

8
Identifying Market
Segments and
Targets

Kotler Keller
Effective Targeting Requires…

• Identify and profile distinct groups of

buyers who differ in their needs and
preferences.
• Select one or more market segments to
enter.
• Establish and communicate the distinctive
benefits of the market offering.

CHP: 8&10-2
Ford’s Model T Followed a Mass
Market Approach

CHP: 8&10-3
 Steps in Market Segmentation,
Targeting, and Positioning

Market
Market
Segmentation
Segmentation
1.
1.Identify
Identifybases
basesfor
for
segmenting
segmentingthethe
market
market
2.
2.Develop
Market
Market Targeting
Developsegment
segment Targeting
profiles 3.
3.Develop
Developmeasure
measureof of
profiles
segment
segmentattractiveness
attractiveness
4.
4.Select
Selecttarget
targetsegments
segments

Market
Market positioning
positioning
5.
5.Develop
Developpositioning
positioning
for
for
target
targetsegments
segments
6.
6.Develop
Developaa CHP: 8&10-4
marketing
Four levels of Micromarketing

Segments Niches

Local areas Individuals

CHP: 8&10-5
Segment Marketing

Targeting a group of customers

who share a similar set of
needs and wants.

CHP: 8&10-6
Figure 8.1 Basic Market Preference Patterns

CHP: 8&10-7
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.

CHP: 8&10-8
Figure 8.2 Examples of Market
Customization

CHP: 8&10-9
Segmenting Consumer Markets

Geographic
Geographic

Demographic
Demographic

Psychographic
Psychographic

Behavioral
Behavioral

CHP: 8&10-10
Demographic Segmentation

Age
Age and
and Life
Life Cycle
Cycle
Life
Life Stage
Stage
Gender
Gender
Income
Income
Generation
Generation
Social
Social Class
Class

CHP: 8&10-11
Psychographic
Segmentation:
The VALS
Segmentation
System

CHP: 8&10-12
Behavioral Segmentation
Decision Roles Behavioral Variables
• Initiator • Occasions
• Influencer • Benefits
• Decider • User Status
• Buyer • Usage Rate
• User • Buyer-Readiness
• Loyalty Status
• Attitude
CHP: 8&10-13
Figure 8.5 Behavioral
Segmentation Breakdown

CHP: 8&10-14
Segmenting for Business Markets

Demographic
Demographic

Operating
Operating Variable
Variable

Purchasing
Purchasing Approaches
Approaches

Situational
Situational Factors
Factors
Personal
Personal
Characteristics
Characteristics
CHP: 8&10-15
Segmenting for Business Markets

• Demographic segmentation
– Industry, company size, location
• Operating variables
– Technology, usage status,
customer capabilities
• Purchasing approaches
• Situational factors
– Urgency, specific application, size
of order
• Personal characteristics
– Buyer-seller similarity, attitudes
toward risk, loyalty

CHP: 8&10-16
Effective Segmentation
Criteria

• Size, purchasing power,

Measurable
Measurable profiles
of segments can be
measured.
Accessible
Accessible • Segments can be effectively
reached and served.

Substantial • Segments are large or

Substantial profitable enough to serve.
• Segments must respond
Differential
Differential differently to different
marketing mix elements &
programs.
• Effective programs can be
Actionable
Actionable designed to attract and serve
the segments.
CHP: 8&10-17
Market Targeting
Evaluating Market Segments
• Segment Size and Growth
– Analyze current sales, growth rates and expected
profitability for various segments.
• Segment Structural Attractiveness
– Consider effects of: competitors, availability of
substitute products and, the power of buyers &
suppliers.
• Company Objectives and Resources
– Company skills & resources needed to succeed in
that segment(s).
– Look for Competitive Advantages. CHP: 8&10-18
Market Targeting
Market Coverage Strategies
Company
Company
Marketing
Marketing Market
Market
Mix
Mix
A. Undifferentiated Marketing
Company
Company
Marketing Segment
Segment11
MarketingMix
Mix11
Company
Company Segment
Segment22
Marketing
MarketingMix
Mix22
Company
Company Segment
Segment33
Marketing
MarketingMix
Mix33
B. Differentiated Marketing

Segment
Segment11
Company
Company
Marketing Segment
Marketing Segment22
Mix
Mix
Segment
Segment33
CHP: 8&10-19
C. Concentrated Marketing
Figure 8.6 Patterns of Target Market
Selection

CHP: 8&10-20
Figure 8.6 Patterns of Target Market
Selection

CHP: 8&10-21
Figure 8.6 Patterns of Target Market
Selection

CHP: 8&10-22
MARKETING MANAGEMENT
12th edition

10
Crafting the Brand
Positioning

Kotler Keller
Marketing Strategy

Segmentation
Segmentation

Targeting
Targeting

Positioning
Positioning

CHP: 8&10-24
Positioning

Act of designing the company’s

offering and image to occupy
a distinctive place in the mind of
the target market.

CHP: 8&10-25
Choosing a Positioning
Strategy

Step 1. Identifying
Possible
Competitive
Advantages
Step 2. Selecting
the Right
Competitive
Advantage
Step 3.
Communicating and
Delivering the
Chosen Position
CHP: 8&10-26
Defining Associations
Points-of-difference Points-of-parity
(PODs) (POPs)
• Attributes or benefits • Associations that are
consumers strongly not necessarily unique
associate with a brand, to the brand but may
positively evaluate, and be shared with other
believe they could not brands
find to the same extent
with a competitive
brand

CHP: 8&10-27
Consumer Desirability Criteria for
PODs

Relevance
Relevance

Distinctiveness
Distinctiveness

Believability
Believability

CHP: 8&10-28
Deliverability Criteria for PODs

Feasibility
Feasibility

Communicability
Communicability

Sustainability
Sustainability

CHP: 8&10-29
Examples of Negatively Correlated
Attributes and Benefits
• Low-price vs. High • Powerful vs. Safe
quality • Strong vs. Refined
• Taste vs. Low • Ubiquitous vs.
calories Exclusive
• Nutritious vs. Good • Varied vs. Simple
tasting
• Efficacious vs. Mild

CHP: 8&10-30
Developing and Communicating a
Positioning Strategy
• Positioning: How many ideas to
promote?
• Unique selling proposition
– Four major positioning errors
1. Underpositioning
2. Overpositioning
3. Confused positioning
4. Doubtful positioning

CHP: 8&10-31
Differentiation Strategies

Product Personnel

Channel Image

CHP: 8&10-32
Product Differentiation
• Product form • Style
• Features • Design
• Performance • Ordering ease
• Conformance • Delivery
• Durability • Installation
• Reliability • Customer training
• Reparability • Customer consulting
• Maintenance

CHP: 8&10-33
Identity and Image

Identity: Image:
The way a The way the
company aims to public perceives
identify or the company or its
position itself products

CHP: 8&10-34