Segmentation, Targeting and Positioning:

Building the Right Relationships

with the Right Customers

Diocena, Ada
Flores, RR
II-5

Mr. Jonathan Alfonso Comilang

 Segmentation, Targeting and Positioning:
Building the Right Relationships with the Right Customers

Segmentation Variables
Geographic Segmentation

• World region or country

• Region of country

• City or metro size

• Density or climate

Demographic Segmentation

• Age, gender, family size, income, occupation, etc.

• The most popular bases for segmenting customer groups.

• Easier to measure than most other types of variables.

Psychographic Segmentation

• Dividing a market into different groups based on:

-Social class
-Lifestyle
-Personality characteristics
• Targeting whitening toothpaste at psychographic segment who are active and concerned
about sexual attractiveness

Behavioral Segmentation

Product usage and experiences

• Usage Rate: quantity or purchase — light, medium, or heavy.

• Experiences: our decisions are based on our experience with the brand.

Based on Occasions.

– Special promotions for holidays

(e.g., Hershey Kisses & Ham)

– Special products for special occasions

(e.g., Customized cakes)

Segmenting Business Markets
• Consumer and business markets use many of the same variables for segmentation.

• Business marketers can also use:

Operating characteristics

Purchasing approaches

Situational factors

Personal characteristics

Evaluating Market Segments

• Segment size and growth

Analyze current segment sales, growth rates and expected profitability.

• Segment structural attractiveness

Consider effects of: competitors, existence of substitute products, the power of buyers/suppliers.

• Company objectives and resources

Examine company skills and resources needed to succeed in that segment.

Offer superior value/gain competitive advantage.

Segment Success Criteria

• Measurable – Ability to measure numerically

• Accessible – Ability to reach segment

• Substantial – Ability to support the business

• Differentiable – Ability to find unique position in segment

• Actionable – Ability to pursue and capture the segment

Levels of Segmentation
 1. Mass marketing (Undifferentiated)

– No segments and single marketing mix.

• Focus is on common (not different) needs of consumers.

• Product and marketing program are geared to the largest number of buyers.

• Uses mass advertising and distribution.

2. Differentiated marketing

– Large segments with specific marketing mixes.

• Firm targets several market segments and designs separate offers for each.

• The goal is to have higher sales and a stronger position with each market segment.

• This approach increases the costs of doing business.

3. Niche marketing

– Small segments with specialized marketing mixes.

• The focus is acquiring a large share of one or a few segments of niches.

• Generally, there are fewer competitors.

4. Micro-marketing

– Customized marketing to individuals.

– Tailoring products and marketing programs to suit the tastes of specific

individuals and locations.

Target Marketing
• Markets are divided into segments; then profitable segments are selected as target
audiences.

• Through targeting, the organization can:

design specific communication strategies to match the consumer’s needs and wants.

position the product in the most relevant way to match their interests.

Successful Positioning
• Product position
 How a product is viewed by consumers relative to competing products.

• Three positioning steps

Identify competitive advantages on which to build a differentiated position.

Choose the right competitive differentiation.

Select an overall positioning strategy.

Gaining Competitive Advantage

• Key to winning target customers is to understand their needs better than competitors do
and to deliver more value.

• Competitive advantage – extent to which a company can position itself as providing superior
value.

Identifying Competitive Advantage

• Product differentiation

Consistency, durability, reliability, reparability.

• Services differentiation

Speed, convenience, careful delivery.

• Image differentiation

Convey benefits and positioning.

• People differentiation

Hiring, training better people than competition

Successful Differentiation
• Important – of value to consumers.

• Distinctive – obvious and clear.

• Superior – better value than competitors.

• Communicable – explainable.

• Pre-emptive – defendable and unique.

• Affordable – delivers value for cost.

 • Profitable – company can make money.

Communicating and Delivering the Chosen Position

• Take strong steps to deliver and communicate the desired position to target consumers.

• Support positioning strategy with marketing mix efforts.

• Monitor and adapt the position over time to match changes in consumer needs and
competitors’ strategies.