Marketing

Communications

John Egan

Chapter 7
Target
Marketing

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 Target Marketing
Learning Objectives

Understand why segmentation, targeting and positioning

are seen as fundamental to marketing.
Explain the major ways in which a market can be
segmented.
Describe ways in which a segment might be targeted.
Recognise the place of loyalty in the target marketing
process.
Understand the concepts behind positioning and re-
positioning in target markets.

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 Target Marketing
STP

Successful marketing campaigns are said to be

dependent on the answers to three basic questions;
Who is my customer?
What do they buy?
Where can I find them?
Tools?
Segmentation,
Targeting &
Positioning

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Target Marketing
Market Segmentation
MASS MARKET

MARKET SEGMENT

TARGET MARKET

Positions occupied
In target market
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 Target Marketing
Market Segmentation
Some segments may be more attractive (because
they are more practical and/or beneficial) to
target than others.
Attractive target markets will generally be more
profitable because they are;
Closer or more easily reachable than other target
markets
May prove or have already proven to be more
loyal and/or
May prove or have proven to be heavy users of
the product or service.

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 Target Marketing
Market Segmentation
ADMARS
Accessible:
A they can be reached through
specific media
Differentiated:
D measurably different from
other segments
Measurable:
M they can be defined and measured
to some degree of accuracy.
Actionable:
A the company has the resources to
reach them.
Relevant:
R the product/service is relevant to
this segment
Substantial:
S large enough to warrant targeting.
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 Target Marketing
Segmentation Types
Consumer & Industrial Markets
Consumer Markets
Demographics (including lifestage, earnings, social
class, learning etc.)
Geodemographics (demographics cross-referenced
with location)
Psychographics (personality & lifestyle based on
interests & opinions (AIO).
Benefits sought (based on needs of the consumer)

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 Target Marketing
Segmentation Types
Consumer & Industrial Markets
Industrial (B2B) Markets
Company type (Standard Industrial Code)
Company size (corporation or SMEs)
Company structure (e.g. central/diversified)
Location (national/international)
Heavy/Light Users (contract/delivery values)
Title/position (of key decision makers)
Benefits sought (based on the needs of the organisation)

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 Target Marketing
Market Segmentation
2 or more variables

Frequent
Potential
Travellers Market for
Vineyard
Holidays?

Wine
Drinkers

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 Target Marketing
Market Segmentation
Age <14 14-16 17-19 20-24 25-35 35-45 45+
Young Saver Products
Youth Current Account
Student Account
Credit Cards
Home Loans
Insurance
Consumer Finance
Pensions
Investments

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 Target Marketing
Market Segmentation
Principle Oriented Status Oriented Action Oriented
Abundant 
Actualisers
 8% 
RESOURSES

Fulfilled  Experiencers
11% Achievers 12%
13% 
 
Believers Makers
Strivers 13%
16% 13%

Minimal Strugglers
12%
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 Target Marketing
Targeting
Target Market Strategies

Undifferentiated or Mass Market (e.g. Heinz Soup)

Differentiated (e.g. Sony)

Concentrated or Niche (e.g. Innocent Smoothies)

Individualised targeting (one-2-one Targeting)

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Target Marketing
Targeting
Market Segmentation Top
Down

Market
Segregation
Using databases

Bottom
Up

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 Target Marketing
Loyalty
Two main strands of thought on commercial loyalty
A definition of loyalty in behavioural terms, usually
based on the number of purchases and measured by
monitoring the frequency of such purchases and any
brand switching.
A definition of loyalty in attitudinal terms,
incorporating consumer preferences and disposition
towards brands to determine levels of loyalty

Javalgi and Moberg 1997

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 Target Marketing
Loyalty
High Relative Attitude Low
Relative Patronage High

SPURIOUS
LOYALTY LOYALTY

LATENT NO
LOYALTY LOYALTY
Dick &
Low

Basu 1994

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 Target Marketing
Loyalty
3 ways types of customer repatronising behaviour:
Switching behaviour: purchasing is seen as ‘either/or’
decision – either the customer stays with you (loyalty)
or turns against you (switching).
Promiscuous behaviour: customers seen making a
‘stream of purchases’ but within context of either/or
decision – either the customer is with you (loyalty) or
flits among an array of alternatives (promiscuous).
Polygamous behaviour: again, the customer makes a
stream of purchases but their loyalty is divided among
a number of products. They may be more or less loyal
to your brand than any other.
Uncles 1994
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 Target Marketing
Loyalty
Light/Heavy Users
Who is more valuable?

Heavy User/Multi-brand Light User/Loyal to Brand

Coca-Cola 20 Units
Pepsi Cola 15 Units Pepsi Cola 10 Units
Virgin Cola 10 Units
Sainsbury’s Cola 10 Units

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 Target Marketing
Positioning
Positioning Strategy

Identification of competitors
Assessment of consumers’ perception of competitors
Determination of positions of competitors
Analysis of consumers’ preferences
The positioning decision
Implementation of the positioning
Monitoring the position.

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 Target Marketing
Positioning
Basic Quality
Re-positioning
GCo ♦
♦ HCo
GCo ♦
OurCo ♦ CCo ♦
FCo ♦
Traditional

BCo ♦ ECo ♦
Modern

ACo ♦
DCo ♦

European Furniture Market

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 Target Marketing

THANK YOU FOR YOUR ATTENTION

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