PRINCIPLES OF MARKETING Eighth Edition Philip Kotler and Gary Armstrong

Chapter 7 Market Segmentation, Targeting, and Positioning for Competitive Advantage
 Copyright 1999 Prentice Hall

Targeting. Select Target Segment(s) 3.Steps in Segmentation. Identify Bases for Segmenting the Market 7-2 Market Positioning Market Targeting Market Segmentation  Copyright 1999 Prentice Hall . Develop Positioning for Each Target Segment 4. Develop Profiles of Resulting Segments 1. and Positioning 6. Develop Marketing Mix for Each Target Segment 5. Develop Measures of Segment Attractiveness 2.

Market Segmentation Levels of Market Segmentation Mass Marketing Same product to all consumers (no segmentation) 7-3 Segment Marketing Different products to one or more segments (some segmentation) Niche Marketing Different products to subgroups within segments ( more segmentation) Micromarketing Products to suit the tastes of individuals or locations (complete segmentation)  Copyright 1999 Prentice Hall .Step 1.

Step 1. gender. or income Psychographic Social class. uses. regions or cities 7-4 Demographic Age. lifestyle. or responses  Copyright 1999 Prentice Hall . or personality Behavioral Occasions. family size and life cycle. Market Segmentation Bases for Segmenting Consumer Markets Geographic Nations. states. benefits.

Using Multiple Segmentation Bases: Geodemographics 7-5  Copyright 1999 Prentice Hall .

Step 1. Market Segmentation Bases for Segmenting Business Markets 7-6 Personal Characteristics Demographics Situational Factors Bases for Segmenting Business Markets Operating Characteristics Purchasing Approaches  Copyright 1999 Prentice Hall .

Step 1. Market Segmentation Bases for Segmenting International Markets 7-7 Industrial Markets Geographic Economic Political/ Legal Cultural  Copyright 1999 Prentice Hall Intermarket .

• Segments must respond differently to different marketing mix elements & actions. • Must be able to attract and serve the segments. profiles of segments can be measured. • Segments must be effectively reached and served. Market Segmentation Requirements for Effective Segmentation Measurable Accessible Substantial Differential Actionable  Copyright 1999 Prentice Hall 7-8 • Size. . • Segments must be large or profitable enough to serve.Step 1. purchasing power.

• Company Objectives and Resources – Company skills & resources relative to the segment(s).Step 2. Availability of Substitute Products and. Market Targeting Evaluating Market Segments • Segment Size and Growth – Analyze sales. the Power of Buyers & Suppliers. 7-9 • Segment Structural Attractiveness – Consider effects of: Competitors.  Copyright 1999 Prentice Hall . – Look for Competitive Advantages. growth rates and expected profitability.

Step 2. Market Targeting Market Coverage Strategies Company Marketing Mix A. Undifferentiated Marketing 7-10 Market Company Marketing Mix 1 Company Marketing Mix 2 Company Marketing Mix 3 B. Concentrated Marketing  Copyright 1999 Prentice Hall . Differentiated Marketing Segment 1 Segment 2 Segment 3 Company Marketing Mix Segment 1 Segment 2 Segment 3 C.

Market Targeting Choosing a Market-Coverage Strategy Company Resources 7-11 Product Variability Product’s Stage in the Product Life Cycle Market Variability Competitors’ Marketing Strategies  Copyright 1999 Prentice Hall .Step 2.

Positioning for Competitive Advantage • Product’s Position . i.the place the product occupies in consumers’ minds relative to competing products. • Marketers must: 7-12 – Plan positions to give products the greatest advantage – Develop marketing mixes to create planned positions  Copyright 1999 Prentice Hall .Step 3.e. Volvo positions on “safety”.

Positioning for Competitive Advantage: Strategies Product Class Away from Competitors Product Attributes Benefits Offered C 7-13 G H A Against a Competitor D E B F Usage Occasions Users  Copyright 1999 Prentice Hall .Step 3.

Effectively communicating adn delivering the chosen position to the market. Selecting the right competitive advantage. • Step 3.Steps to Choosing and Implementing a Positioning Strategy • Step 1. Identifying a set of possible competitive advantages: Competitive Differentiation.  Copyright 1999 Prentice Hall . 7-14 • Step 2.

Developing Competitive Differentiation Product 7-15 Service Areas for Competitive Differentiation Personnel  Copyright 1999 Prentice Hall Image .

Selecting the Right Competitive Advantages Important 7-16 Profitable Affordable Criteria for Determining Which Differences to Promote Distinctive Superior Preemptive Communicable  Copyright 1999 Prentice Hall .

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