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Targeting, Segmentation,& Positioning


Target Marketing
Identifying those particular groups of customers which your product/service is capable of meeting their requirements (needs) most. Each of these groups constitute a market


Selecting one or more segments to enter Establishing and communicating the products key distinctive benefits in that market

Market Segment
A large identifiable group within a market with similar wants, purchasing power, geographical locations, buying attitudes

Niche Marketing
What is an attractive niche ? A distinct set of needs A premium can be charged Not likely to attract competition Gains certain economies through specialisation Sufficient size, profit and growth potential

Local Marketing
When the marketing mix is altered to suit the local conditions eg. Giving a higher/ lower discount than whats prevailing in the rest of the markets or implementing a different promotion scheme

Individualised Marketing
When the firm deals with each customer on a one to one basis When products are customised for the customer

Market Targeting
Single segment concentration Selective specialisation Product specialisation Market specialisation Full Market coverage undifferentiated marketing differentiated marketing

Undifferentiated Marketing
Single product addressing all segments with a single marketing program. Mass production is possible giving scale economies Pushes price downwards enabling to attract price sensitive segments

Differentiated Marketing
A separate market offering for every segment Marketing programs for every segment could be different Pushes up costs at various levels, necessitating sufficient volumes for viability Generates inter-segment rivalry


The analytical goal is to measure Consumer Behaviour and place each person in a group (segment) that will minimise the behaviour between each member of the segment and maximise the variance between segments

Why do we need to segment?

Because people vary so much from other people needs, motivations, decision processes, buying behaviour To maintain focus on the customer target segment To customise advertising according to target segment

Behavioral variables
Occasions birthdays, lunchtime,vacations Benefits business, vacation, educational User status non users, ex users, first time users, regular users, potential users Usage rate light, medium, heavy

Loyalty status diehards,shifters,switchers Buyer Readiness unaware aware informed interested desire intention to buy Attitude enthusiastic, positive, indifferent, negative, hostile

Criteria for segmentation

Measurable Substantial Accessible Differentiable Actionable

Bases for segmentation

Geographic Demographic Psychographic Behavioural benefit, usage situation, extent of usage

Segmentation Strategy/ Bases for segmentation

Geographic Demographic Brand Loyalty Attitudes and benefits Psychographic or lifestyle Behavioural benefit, usage situation, extent of usage Culture and ethnic subculture

Factors affecting size of segments

Affluence Sophisticated consumer measurement and databases Custom manufacturing New forms of distribution

Reaching Target segments

Controlled coverage Customer self-selection

Segmentation is a spectrum
Concentrated marketing Differentiated marketing Mass marketing Niche marketing


What the product stands for? Mind-share
Positioning and segmentation strategies must have fit. A brand must be positioned to be maximally effective in attracting the desired target segment.

Positioning strategies
Product characteristics/benefits Price-quality approach Use or application approach Product class approach Product user approach Cultural symbol approach Competitor approach

Positioning strategies
Identify competitors Determine how competitors are perceived and evaluated Determine the competitors positions Analyse the customers Select the position Monitor the position

Positioning Decision
Economic analysis should guide the decision Segmentation commitment Not change for change sake. To stick with the advertising if it is working. Make it easy for customers to remember/recall. Use symbols, logos, etc. as a memory aid. Be honest.

Segmentation and Planning for change

The result of understanding and relating to an increasingly fragmented market place

Planning for change

Unless managements act, the more successful a company has been in the past, the more likely it is to fail in the future. Because the basic psychological principle is that people tend to repeat behaviour for which they have been rewarded Successful strategies must fit an environment that is constantly changing. Frequently the future arrives before managers are willing to give up the present.

Consumer Analysis and Social Policy

Policy issues related to macromarketing and trends in consumer decisions Behavioural/ Psychological economics

Enhanced Shareholder Value (ESV)

The ability of a company to provide job security and satisfaction, satisfy customers, grow profits consistently, adopt sound long-term strategies, ability to weather business shocks.

3 Ms of profit Growth
More markets More market share More margins

Markets have 4 components

People and their needs Ability to buy Willingness to buy Authority to buy

Customer Buying Career

Observing Making requests Making selections Making assisted purchases Making independent purchases

Behavioral consumer segmentation (Generational Cohort analysis)

Baby boomers Baby busters Skippies Yuppies Muppies Empty nesters Young again

Focusing on ones own way of doing things with very little sensitivity or interest in the ways of the world Marketing practitioners need cultural empathy defined as the ability to understand the inner logic and coherence of other ways of life.

Porters 5 factors that characterise contemporary markets

Growing similarity of countries Fluid global capital markets Technological restructuring Integrating role of technology New global competitors

Cultural analysis of global markets

Cultural empathy Think global, act local Think local, act global Glocalisation Therefore, standardisation is rarely possible.

Communication Problems
The diversity of markets and consumers also pose several communication challenges for marketers Therefore visual language, pictures are mostly used for better universal understanding. Gestures and words can be misleading

Language problems
Please leave your values at the desk Paris Hotel Drop your trousers here for best results Bangkok laundry Because of the impropriety of entertaining guests of the opposite sex in the bedroom, it is suggested that the lobby be used for the purpose Zurich hotel The manager has personally passed all water served here Acapulco restaurant Ladies are requested not to have children in the bar Norway bar

Conceptual Equivalency
Come alive with Pepsi Come alive out of the grave Germany Pepsi brings your ancestors back from the grave - China