1.

Segmentation
• Group Customers based on similar needs
• Pro le each segment

Why segment a market:

• Better focus on consumer needs: No single market mix can satisfy everyone
• More e ective marketing strategies: Use separate marketing mixes for di erent segments
• Allocate resources based on attractiveness of di erent segments: identify who are the most
important customers => put more resources into that segment.

Geographic segmentation:
Ex: countries, regions, city sizes, weather, neighbourhoods...
• Looking into areas with heavy usage.
• Not a great way, too board. However, is a good rst step.

Demographic segmentation:
Ex: age, gender, income, religion, occupation, education, race...
• Most widely used as it is easy to do.

Psychographic segmentation:
Ex: personalities, behaviours, attitudes, and lifestyles
• Heavily used by advertising agencies for positioning strategy
• Lifestyle: People's decisions about how they live their daily life (family, job, social, and consumer
activity). Highly correlated with heavy usage who we want as customers. Usually data collected
through large-scale survey)

Behavioural segmentation:
Ex: bene ts sought, usage rate, loyalty level.
• Dividing a consumer population into homogenous groups based on their needs, attitude, use, or
response to a product
◦Purchase occasion: time of day, holiday
◦Bene ts people seek when buying: bleaching vs scented detergent (chất tẩy rửa)
◦User status: non-user, ex-user, potential user, regular user
◦Usage rates for a product: light, medium, heavy
 ◦Loyalty toward a brand/product: completely, somewhat, not at all.

• Bene ts-of-product segmentation:

◦Focuses on the features people seek in a good or service and the bene ts that they expect to
receive (the needs and wants)
◦Groups consumers into segments based on what they want a product to do for them rst,
then for those consumers, try to further describe them based on others types of segmentation
=> better picture of these consumers => nd better messages that appeal to di erent target
market.

Benefits Demographic
Fife Lifestyle Brands
2. Targeting
• Assess attractiveness of each segment
• Select Segments to target

E ective segmentation criteria:

• Measurable: size of segment
• Substantial: large enough
• Di erentiable: able to come up with di erent positioning strategy to appeal di erent target markets
• Actionable: able to reach these segments with marketing strategies
• Accessible: know how to reach to the segments

Answer these questions to determine which segment to appeal to:

• Who are our ideal customers?
• Does what we o er align with what they want?
• What is the size and growth rate (potential) of a segment?
• Companies objectives and resources? (Ex: limited resources => go after smaller target market/
segments)

Levels of segmentation
• Mass marketing/undi erentiated marketing (not common):
◦No need to segment as everyone has the same needs
◦Goal: reach as many consumers as possible with just a single market o ering (ex: coca-cola
with one product and market to many di erent consumers)
◦Used when:
‣ Consumers have common or very similar needs
‣ Products are undi erentiated (example: milk, toilet paper, utilities can be consumed by
anyone)
‣ Economies of scales are important
• Product and marketing program are geared to the largest number of buyer => make
large number of products to keep the cost down
• Use mass marketing and distribution
‣ Cannot be used when competitors are using di erentiated marketing (ex: toilet paper has
di erent size, softness, shapes - product di erentiation, not necessary mean market
segmentation)
• Segmentation marketing/di erentiated marketing (most cases):
◦Focus on one or several segments
◦Goal: to come up with stronger position with each market segment, therefore can obtain
higher total market share
◦Use when:
‣ Have resources (cost to appeal with di erent strategies and needing di erent products to
attract these di erent segments => increase the costs of doing business)
‣ Products can be di erentiated (have di erent features)
‣ Your competitors are mass marketing => can give you advantages
◦Example: Nike shoes - cross trainers, basketball, soccer, running, walking...

• Niche/concentrated marketing (rare):

◦Somewhat di erent strategy - go after much a much smaller and very speci c segment
◦Goal: acquire a large share of one or a few segments of niches. Strong position and large
market share of small market instead of small market share of large market.
◦Use when:
‣ Have few resources
‣ Not many competitors (internet is ideal for targeting small niche markets and CHEAP!)
‣ Products must be able to be di erentiated
◦Example: car industry - SUVs focus on families, Tetra has 80% market share in the (small and
speci c) tropical sh food market...

• Micro-marketing (very rare):

◦Very speci c marketing strategy to attract a very small group of consumers/potentially
individual or local consumers.
◦Internet has allow micro-marketing in a way that it's not expensive to do
◦Goal: target market o ering as speci c as possible - can implement at the individual level or
locally (at geographic level - cities, neighbourhoods)
◦Use when:
‣ Have lots of resources - expensive to customise o ers
‣ Products must be able to be di erentiated and to the extreme (can pick certain speci c
needs, whether it is local needs and appeal to those customers)
‣ Consumers value uniqueness (unique wants and needs - ex: camel milk)
‣ There are regional di erences in consumer preferences
◦Example:
 ‣ Collaborative ltering on Amazon - auto marketing: your search history information is
used to give speci c recommendations => everyone page looks di erent.
‣ Mass customisation: allow customers to tailor certain features of the product based on
individual needs, on a large scale (sneakers, handbags, car, wine...)

3. Positioning
• De ne value proposition for target segments
• Identify and select positioning strategy

What is it?
• The place a brand or product occupies in the customer's mind on important attributes and relative
to your competitors (how people perceive a product - can be anything and everything). For
example, how consumer perceive the quality to be and is it di erent than the actual quality.
• There is no single right way to position yourself, but have to look at:
◦The speci c target market
◦What you're trying to appeal to
◦What are the most important attributes of your product and how certain attributes are going to
be di erentiated relative to competition.

Di erent ways to di erentiate:

• Versus competitors: show how the brand are di erent from competitors
• Product di erentiation: show how the product is di erent from competitors' product - based on
attributes (safety, price, performance...), usage occasion (for party, for daily use...), and product
user (baby uses baby shampoo...)
• Branding/bene ts o ered: associate di erent brands with di erent bene ts (cars which produce
less carbon-dioxide)
• Di erentiate on service, channels, people...

Example: Hershey Kisses's campaign - "Big things come in little packages" => focus on quality of the
product (product attributes di erentiation)

How to achieve successful di erentiation:

• Best to stress one (or a few) attributes/bene ts/di erences.
◦Clear positioning => easier for consumers to remember.
 ◦Usage occasion often second or third positioning strategy.
• Provide a unique selling proposition - giving a reason why consumers should purchase your
product (segment on families with small children, safety is important => should focus on)
• Without distinctive positioning, a brand is lost.

Important factors to consider for their position strategy:

• What segments are they trying to reach?
• Position of competitors
• Composition of brand - position need to be consistent with the brand
=>> Using PERCEPTUAL MAP:

• Example:
◦Step 1- identify segments:
‣ In segment of a large group of consumers, they might want to have a little bit more heavy
body beer and not too expensive (domestic beer). I
‣ In smaller segment of people who are willing to pay signi cantly higher price (imported
beer).
‣ Some segment of people
who like light beer.
◦Step 2 - identify their sizes: how
many people in each segment
◦Step 3 - ask about perception of
brands (competitors).
◦Step 4 - put these information on
the map: the big green circles are
the target markets. The bigger the
circle are, the larger the market.
Not a good idea to be
somewhere in the middle of two
segments as you would be
disadvantages with competitors
in those segments.
‣ Where does your product
t?
 ‣ Which position is your product in?
‣ If it is not t to any speci c market, which position should you try to relocate your
product?
‣ Example: Carlton Draught tries to t into the small market in the middle:
• Move down to the light beer => need to change product
• Move left to the budget beer => lower prices and use an advertising pricing strategy

Positioning strategy using perceptual maps to:

• Move a brand closer to ideal point of a target market => generally involves repositioning
• Introduce a new brand near the target segment's ideal point
• Shift ideal point by introducing new attributes or by changing the importance of other attributes
• Repositioning involves changing the place and o ering occupies in a consumer's mind relative to
competitive o erings.
• Make sure to monitor and adapt position over time.