Chapter-7 PDF

CHAPTER 7
MARKET SEGMENTATION,
TARGETING, AND
POSITIONING
STEPS IN MARKET SEGMENTATION,
TARGETING, AND POSITIONING
Market Segmentation
1. Identify bases for
segmenting the market
2. Develop segment profiles
Market Targeting
3. Develop measure of
segment attractiveness
4. Select target segments
Market Positioning
5. Develop positioning for
target segments
6. Develop a marketing mix
for each segment
Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved.
LEVELS AND PATTERNS OF MARKET
SEGMENTATION
 Patterns for Market Segmentation
Preference segments
 Homogeneous preferences
 Similar brands
 Diffused preferences
 Different brands
 Clustered preferences
 Natural market segments
 Concentrated marketing
 Largest group
FOUR LEVELS OF MICROMARKETING
Segments Niches
Local areas Individuals
Niche Marketing: A niche is a more narrowly defined group
seeking a distinctive mix of benefits. Marketers usually
identifies niches by dividing a segment into sub-segments.
Eg. Producer of environmentally friendly products, Printers for printing
maps, Insurance for risky drivers, Market for Ferrari sports Car, Used
book markets (BOOKWORM).
Local Marketing: Target Marketing is leading to marketing

programs tailored to the needs and wants of local customer
groups. Local marketing reflects a growing trend called
grassroots marketing. Eg. Local Newspaper, Cable Channel
and advertisement.
Customized Marketing: ‘One to one’ Marketing. Eg. Tailored
made clothes.
Bases for Segmentation
Psychographic:
Culture, sports or
Psychographic Demographic: age, family size, life
Demographic
outdoor oriented cycle, gender, income, occupation
Customer
Characteristics
Socioeconomic:
SocioeconomicSocial Geographic
Class, socio-economic
Behavior: Behavior
Regular occasion Outlets
Usage: non~regular user; Buying

light~heavy user Situation
Awareness: Benefits
Benefits: Quality,
Awareness
Unaware-Loyal speed, economy
DEMOGRAPHIC SEGMENTATION
Age and Life Cycle (Chips)

Life Stage (Video Camera for parents)
Gender (Gillette for Men/ Women)
Income (Luxury to Budget Apartment)
Generation
Social Class
(Magic Tooth Powder)
 GENERATION EFFECT AND COHORT
Sociologists attribute different consumer needs
and wants among various age groups to the
cohort effect
Cohort effect is a tendency among members of
a generation to be influenced and drawn together
by significant events occurring during the certain
years.
 Age between 4-14 has influence in urban buying
decision. The influence of buying chips, bicycle,
play station, Xbox etc.
 13-18 and 19-24 age group consider young
adults are major decision maker of cell phone,
case of cell phone.
8-8 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved.
 GENERATION EFFECT
 SOCIAL CLASS EFFECT
 SEGMENTING BY HOUSEHOLD TYPE
 The “traditional family” to “other types of Family”
 Single-parent families, single-person households, and
non-family group households
 Non-traditional households make likely buyers of
single-serving and convenience foods
Psychographic:
Culture, sports or
Psychographic Demographic: age, family size, life
Demographic
outdoor oriented cycle, gender, income, occupation
Customer
Characteristics
PSYCHOGRAPHIC SEGMENTATION
Divides a population into groups that have
similar psychological characteristics, values,
and lifestyles
The most common method for developing

psychographic profiles of a population is to
conduct a large-scale survey:
VALS.
“Values and Lifestyles”
VALS
VALS Segments
 Actualizers: Successful, sophisticated, active, take-
charge people with high self esteem and abundant
resources.
 Fulfilleds and believers:
 Fulfilleds: mature, satisfied, comfortable people who
value order, knowledge and responsibility. They
look for functionality, value and durable products
 Believers: Conventional people….family, church,
community based jobs
 Achievers and strivers:
 Achievers: are successful career and work oriented
people. Do work which give sense of duty, prestige
 Strivers: Seek motivation, approval from the world
around them. Money defines success for
strivers……
VALS Segments
 Experience and Makers:
 Experiencers: young, enthusiastic, impulsive.
They look for excitement and risky way of life.
They are quick and became enthusiastic about
new possibilities and quick to cool.
 Makers: Practical people who have constructive
skill and value self sufficiency. They live within
practical work, family….building a house, raising
children…..gardening……
 Strugglers: Chronically poor with limited educations
and skills, without strong social bonds. They must
struggle to meet the urgent needs of the present
moment
Behavior: Behavior
Regular occasion
Usage: non~regular user; Buying

light~heavy user Situation
Awareness: Benefits
Benefits: Quality,
Awareness
Unaware-Loyal speed, economy
PRODUCT-RELATED OR BEHAVIORAL
SEGMENTATION
 Dividing a consumer population into homogeneous
groups based on the characteristics of their relationships
to the product
 Can take the form of segmenting based on:
 Benefits that people seek when they buy (Weight
Reducing Tea)
 Usage rates for a product
 Consumers’ brand loyalty toward a product
 Eclipse
 Segmenting by
Benefits (Fresh
Breath) Sought
 USAGE RATES
 Segmenting by grouping people according to the
amounts of a product that they buy and use
 Markets often divided into heavy-user, moderate-user,
and light-user segments
SELECTING A TARGET MARKET
 Before a marketing mix strategy can be
implemented, the marketer must
identify, evaluate, and select a target
market.
Market: people or institutions with
sufficient purchasing power,
authority, and willingness to buy
Target market: specific segment of
consumers most likely to purchase a
particular product
CRITERIA FOR EFFECTIVE SEGMENTATION
 Market segmentation cannot be used in all cases.
To be effective, segmentation must meet the
following basic requirements.
The market segments must be measurable in
terms of both purchasing power and size.
Marketers must be able to effectively promote
to and serve a market segment.
Market segments must be sufficiently large to

be potentially profitable.
The number of segments must match the firm’s
capabilities.
CRITERIA FOR EFFECTIVE SEGMENTATION
Differentiable • Each segment should be different

than the other segments
• Size, purchasing power, profiles

Measurable of segments can be measured.
• Segments can be effectively

Accessible reached and served.
• Segments are large or profitable

Substantial enough to serve.
• Effective programs can be

designed to attract and serve
Actionable
the segments.
Market Positioning
Positioning has been defined as “the art and science of fitting
the product or service to one or more segments of the broad
market in such a way as to set it meaningfully apart from
competition.”
Approaches to Positioning
Positioning strategies generally focus on either the consumer
or the competition.
While both approaches involve the association of product
benefits with consumer needs, the former does so by linking
the product with the benefits the consumer will derive or
creating a favorable brand image
Target Marketing Process
Developing a Positioning Strategy
 Positioning by Products Attributes and Benefit: Linux (Virus
free and ease of use)
Positioning by Price/Quality: Quality need not be affordable
(Clark Shoe)
 Positioning by Use of Application: Stink sucker at Refrigerator
Positioning by Product Class: Airline industry (Low cost and
Comfort based, CD competes with MP3 player)
 Positioning by product user: Couch based Truck
 Positioning by Competitor: Grameen Phone, widest network
Positioning by Cultural Symbols: Mina Cartoon….A symbol of
Struggle for the children
Figure 8.6 Patterns of Target Market Selection
Coca-Cola
Patterns of Target Market Selection
Porsche Tooth Paste

on Sports car
Patterns of Target Market Selection
Calculator for different consumer groups AU for students

Chapter-7 PDF

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Chapter-7 PDF

Uploaded by

Copyright:

Available Formats

CHAPTER 7

Local areas Individuals

Local Marketing: Target Marketing is leading to marketing

Usage: non~regular user; Buying

Age and Life Cycle (Chips)

Income (Luxury to Budget Apartment)

The most common method for developing

Usage: non~regular user; Buying

Market segments must be sufficiently large to

Differentiable • Each segment should be different

• Size, purchasing power, profiles

• Segments can be effectively

• Segments are large or profitable

• Effective programs can be

Porsche Tooth Paste

Calculator for different consumer groups AU for students

You might also like