Market Segmentation, Targeting, and

Positioning for Competitive Advantage
Group 3

Market segmentation
• The process of dividing a market into
meaningful, relatively similar, and identifiable
segments or groups.

Levels of Market segmentation No segmentation Complete segmentation .

Mass marketing • The marketer or seller targets the mass market or the entire consumer base .

. location and age level. requirements.Segment marketing • The marketer or seller divides the market into different segments depending on the consumer’s buying behaviour. purchasing power.

Niche marketing • The seller caters to a very specific segment which needs more attention and high quality products • Lower competition resulting to higher prices .

Micromarketing • Local marketing – marketer only concentrate on the local market. Products have appeal to local usage • Individual marketing – almost the same as direct marketing where market target individual customers separately .

Bases for Segmenting Consumer Market .

In response. its store displays suggest ways for customers to fit IKEA products into the cramped spaces of typical Japanese homes .Geographic segmentation • Ikea discovered that its Japanese customers live in small spaces.

Demographic Segmentation • Age segmentation ▫ (newborns. Generation Y. so marketers should avoid suggesting it . Golden Generation or Depression Generation) ▫ Tweens (9-12) desire to be kids but also want the fun of being teenager ▫ Baby boomers refuse to believe that they’re aging. tweens. Baby boomers. young children. Generation X. teens. infants.

and car makers are starting to cater for them.Demographic segmentation • Gender Segmentation ▫ In the new car market. women are increasingly making buying decision. Ford offers eye shadow and nail polish complementing the color of its cars .

Demographic Segmentation • Income Segmentation ▫ Lexus has travelled the US asking wealthy customers what they want.000 to appeal to this group . and is developing several new cars costing over $70.

Demographic Segmentation • Ethnic Segmentation ▫ Kraft foods and Procter & Gamble are showing interest in Asian Americans due to the growth of Asian supermarket chains .

and the presence or absence of children .Demographic Segmentation • Family Life – Cycle Segmentation ▫ A series of stages determined by a combination of age. marital status.

Psychographic Segmentation • Personality: reflects a person’s traits. attitudes and habits • Motives • Lifestyle • Geodemographics .

. To the benefits they seek from the product ▫ PowerBar is designed for athletes and consumers looking for long-lasting fuel.Benefit Segmentation • Is the process of grouping customers into market segments accdg.

Usage-Rate Segmentation • Divides a market by the amount of product bought or consumed ▫ The 80/20 principle holds that 20 percent of all customers generate 80 percent of the demand .

Bases for Segmenting Business Market .

Bases for Segmenting International market .

purchasing power and profile of segment • Accessible .Size.Requirement for Effective Segmentation • Measurable .Large and profitable enough to serve • Differentiable – respond differently • Actionable – effective programs can be developed .Can be reached and served • Substantial .

Determining attractive market segment • • • • Level of competition Substitute products Power of buyer Power of supplier .

Market targeting • Choosing one market segment for the intention of meeting the needs of that group. • Strategies: ▫ Undifferentiated – mass marketing ▫ Differentiated – segment marketing ▫ Concentrated – niche marketing .

. or organization in general.Market positioning • Developing a specific marketing mix to influence potential customers’ overall perception of a brand . product line.

.Position mapping • creating a visual description about consumer perceptions of a product on two or more dimensions in relation to competitors.

Can we stick it out? Consistency is essential • vi. Whom must we outgun? • iv. What position do we own? ~in the mind of the prospect. Do we have enough money? • v. What position do we want to own? • iii. • ii.Check-list for determining a positioning strategy • i. Does our advertising match our position? .