Market Segmenting,

Targeting, and
Positioning
What is market segmentation

• The process of breaking down all consumers into groups of potential

buyers with similar characteristics
TARGETED MARKETING vs.
MASS MARKETING

• Targeted marketing or differentiated marketing

• Choosing select groups of people to sell to
• Mass marketing or undifferentiated marketing
• Selling the same product to all consumers
Benefits of Segmenting and Targeting
Markets
• Avoid head-on competition with other firms trying to capture the same
customers
• Develop new offerings and expand profitable brands and products lines
• Remarket older, less-profitable products and brands
• Identify early adopters
• Redistribute money and sales efforts to focus on your most profitable customers
• Retain “at risk” customers in danger of defecting to your competitors
Segmenting and Targeting a Firm’s
Current Customers
• Studying their buying patterns
• Firms also try to get a better read on their customers by surveying
them or hiring marketing research firms to do so.
• Using Facebook to develop closer relationships with their customers.
One-to-One Marketing

• Forming close, personal relationships with

customers and giving them exactly what they want.
Steps in One-to-One Marketing
HOW MARKETS ARE
SEGMENTED
• A firm will opted use multiple segmentation bases, or
criteria to classify buyers, to get a fuller picture of its
customers and create real value for them.
Types of Segmentation Bases
• Behavioral segmentation. What benefits do customers want, and how do they
use our product?
• Demographic segmentation. How do the ages, races, and ethnic backgrounds
of our customers affect what they buy?
• Geographic segmentation. Where are our customers located, and how can we
reach them? What products do they buy based on their locations?
• Psychographic segmentation. What do our customers think about and value?
How do they live their lives?
Behavioral Segmentation
• Dividing people and
organization into groups
according to how they behave
with or act toward products
Segmenting by Demographics
• Segmenting buyers by tangible, personal
characteristics such as their ages, incomes,
ethnicity, family sizes, and so forth
• Demographics are commonly utilized to segment
markets because a mountain of demographic
information is publicly available in databases
around the world.
Segmenting by Geography
• Segmenting buyers by where they are located
• Geocoding
• Geodemographics
• Customer profile
• Population density
• Proximity marketing
Segmenting by Psychographics
• Segmenting people by their activities, interests,
opinion, attitudes, values, and lifestyles.
 • Innovators.
Consumers were then • Thinkers.
divided up into the • Achievers.
following categories,
• Experiencers.
each characterized by
certain buying • Believers.
behaviors. • Strivers.
• Makers.
• Survivors.
Consumer insight

• An understanding of consumers that results when both quantitative

and qualitative information are gathered about them.
Segmentation in B2B Markets
• A price-focused segment
• A quality and brand-focused segment
• A service-focused segment
• A partnership-focused segment
SELECTING TARGET
MARKETS AND
TARGETMARKET
STRATEGIES
Selecting Target Markets

• It’s sizeable enough to be profitable given your operating cost.

• It’s growing.

• It’s not already swamped by competitors, or you have found a way to stand out in a crowd.

• It’s either accessible, or you can find a find a way to reach it.

• You have the resources to compete in it.

• It “fits in” with your firm’s objectives and mission.

Target-Market Strategies: Choosing the Number of
Markets to Target

• Multisegment Marketing Strategy - Targeting multiple groups of consumers.

• Concentrated Marketing - Targeting a very select group of customers.
• Niche marketing - Targeting an extremely select group of consumers
• Microtargeting - The process of gathering multiple sources of data available
on people, everything from their tax and phone records to the catalogs they
receive, so as to market to them.
Targeting Global Markets
POSITIONING AND
REPOSITIONING OFFERINGS
• Positioning - Tailoring a product or its marketing so that it stands out from the
competition and people want to buy it

• Perceptual map - is a two-dimensional graph that visually shows where your product
stands, or should stand, relative to your competitors, based on criteria important to
buyers.
• Tagline - A catchphrase designed to sum up the essence of a product

• Repositioning - The process of “moving” a product to a different place in

the minds of consumers
Creating Offerings
WHAT IS AN OFFERING?

• Offerings are products and services designed to deliver value to customers—either to fulfill their needs, satisfy their
“wants,” or both.
WHAT COMPOSES
AN OFFERING?
Product, Price, and Service
• Product - A tangible good that can be bought, sold, and owned.
• Feature - A characteristic of an offering.
• Benefit - The degree to which a feature satisfies a buyer’s need or desire.
• Price The amount exchanged by the buyer to receive the value offered by the product or
service.

• Service is an action that provides a buyer with an intangible benefit.

• total cost of ownership (TCO) - The total amount of time and money spent to acquire, use,
and dispose of an offering.
The Product-Dominant Approach
to Marketing

• product-oriented - An approach to business that centers on capturing

business by focusing on creating and manufacturing better products at
lower prices.
The Service-Dominant Approach to
Marketing
• The advantage of the service-dominant approach is that it integrates the product, price, and service dimensions of
an offering.

• This helps marketers think more like their customers, which can help them add value to their firm’s products.
Product Levels and Product Lines

• A product’s technology platform is the core technology on which it is built.

• Product line - A group of offerings that serve similar needs and are sold under the same name.
• line depth - The number of variations in a single product line.
• line extension - A new idea or offering that occurs when a company comes out with another model (related
product or service) based on the same platform and brand as one of its other products.
• line breadth - The number of different, or distinct, product lines offered by a company.
• product mix - The entire assortment of products that a firm offers.
TYPES OF CONSUMER
OFFERINGS
• Consumer offerings fall into four general categories:
• Convenience offerings
• Shopping offerings
• Specialty offerings
• Unsought offering
Convenience Offerings

• Convenience offerings
• Low-priced, frequently purchased products and services that require little shopping
effort.
• Impulse offering
• An offering that is purchased on impulse, without prior planning.
Shopping Offerings

• shopping offering
• An offering for which the consumer will make an effort to compare various firms’ offerings and
select a brand
Specialty Offerings

• specialty offering
• An offering that is highly differentiated from other offerings and is designed to
satisfy a similar need or want.
Unsought Offerings

• unsought offering
• An offering consumers don’t typically shop for until it is needed. Examples include
funeral and towing services
BRANDING,
LABELING, AND
PACKAGING
Branding
• Brand
• A name, picture, design, or symbol, or combination of those elements, used by a seller to differentiate its offerings from
competitors’.

• Branding
• A set of activities designed to create a brand and position it in the minds of consumers.

• Brand name
• The spoken part of an identity used to describe of a brand.

• brand mark
A symbol or logo used to identify a brand.

• Brand extension
• The process of utilizing an existing brand name or brand mark for a new product category
Packaging Decisions
• Packaging has to fulfill a number of important functions, including
• communicating the brand and its benefits;
• protecting the product from damage and contamination during shipment, as well as
damage and tampering once it’s in retail outlets;
• preventing leakage of the contents;
• presenting government-required warning and information labels.
• primary packaging
• Packaging designed to hold a single retail unit of a product

• secondary packaging
• Packaging designed to hold a single wholesale unit of a product.

• tertiary packaging
• Packaging designed for the shipping and efficiently handling of large quantities of a product.
MANAGING THE
OFFERING
THE PEOPLE BEHIND
• brand manager
• A person responsible for all business decisions regarding offerings within one brand. A brand manager is often
charged with running his or her brand as if it is its own separate business.

• product manager
• Someone with business responsibility for a particular product or product line. Like brand managers, product
managers must make decisions, such as which offerings to include, advertising selection, and Others

• category manager
• Someone responsible for managing a broad group of products that may belong to multiple manufacturers

• market manager
• Someone responsible for managing efforts within a particular market, such as a geographic market or another
grouping of customers into a market (e.g., a single industry or size).
THE NEW OFFERING
DEVELOPMENT
PROCESS