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Chapter 7 Market Segmentation, Targeting, and Positioning for Competitive Advantage
Road Map: Previewing the Concepts   <ul><li>Define the three steps of target marketing: market segmentation, market target...
Steps in Market Segmentation, Targeting, and Positioning (Fig. 7-1)
Step 1. Market Segmentation Levels of Market Segmentation Dividing Markets into Smaller Segments that Can be Reached More ...
Step 1. Market Segmentation Levels of Market Segmentation Niche Marketing Different products to subgroups within segments ...
Step 1. Market Segmentation Geographic Segmentation Density or Climate City or Metro Size World Region or Country
Step 1. Market Segmentation Demographic Segmentation <ul><li>Dividing the market into groups based on variables such as: <...
Step 1. Market Segmentation Psychographic Segmentation Social Class Lifestyle Personality Divides Buyers Into Different Gr...
Step 1. Market Segmentation Behavioral Segmentation <ul><li>Dividing the market into groups based on variables such as: </...
<ul><li>There are many ways to segment a market.  Using the four segmentation variables shown in Table 7-1, discuss which ...
Segmenting Business Markets Operating Characteristics Purchasing Approaches Situational Factors Personal Characteristics B...
Segmenting International Markets May Also Use Intermarket Segmentation Factors Used  to Segment International Markets Geog...
Step 1. Market Segmentation Requirements for Effective Segmentation <ul><li>Measurable:  size, purchasing power, and profi...
Step 2. Market Targeting Evaluating Market Segments <ul><li>Segment Size and Growth </li></ul><ul><ul><li>Analyze current ...
Step 2.  Selecting Market Segments   Market Coverage Strategies (Fig. 7-3)
Step 2.  Selecting Market Segments   Choosing a Market-Coverage Strategy Company Resources Product Variability Product’s L...
Socially Responsible Target Marketing <ul><li>Smart targeting helps companies and consumers alike. </li></ul><ul><li>Targe...
Step 3.  Positioning for Competitive Advantage <ul><li>Product’s Position - the way the product is  defined by consumers  ...
Step 3. Choosing a Positioning Strategy  Step 2. Choosing the Right Competitive Advantage Step 3. Communicating and Delive...
Identifying Possible Competitive Advantages <ul><li>Key to winning and keeping customers is to understand their needs and ...
Identifying Possible Competitive Advantages Services Differentiation i.e. Delivery, Installation,  Repair Services, Custom...
Volvo <ul><li>This ad demonstrates how Volvo positions on the specific product attribute of safety. </li></ul><ul><li>http...
<ul><li>What three major positioning errors should a company strive to overcome?  Describe each one.  </li></ul>
Choosing the Right Competitive Advantages Criteria For Determining Which Differences To Promote Affordable Superior Profit...
Selecting an Overall Positioning Strategy (Fig. 7-4)
Communicating and Delivering the Chosen Position <ul><li>Company must take strong steps to deliver and communicate the des...
Rest Stop: Reviewing the Concepts <ul><li>Define the three steps of target marketing: market segmentation, market targetin...
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  • Drivers for a new proposed sports car. This segment could be measured in general and the number could be approximated from secondary sources (such as from car clubs, automobile companies, interests--such as auto shows, or prior ownership of vehicles). Exact measurement would be difficult. The accessibility of these consumers would be difficult except through their service providers or interest areas. However, promotions (such as magazine, outdoor advertisements, or auto shows) can be constructed. The number is thought be substantial among youth and the affluent, however, this segment would have to be tied to desires for automobiles in general to be useful. An interesting side question would be whether these consumers are gender or geographically concentrated. What role would life style play?
  • Underpositioning – failing to ever really position the company at all. Overpositioning – giving buyers too narrow a picture of the company. Confused positioning – leaving buyers with a confused image of a company.
  • Transcript of "330345 634022944265375000"

    1. 1. Chapter 7 Market Segmentation, Targeting, and Positioning for Competitive Advantage
    2. 2. Road Map: Previewing the Concepts <ul><li>Define the three steps of target marketing: market segmentation, market targeting, and market positioning. </li></ul><ul><li>List and discuss the major levels of market segmentation and bases for segmenting consumer and business markets. </li></ul><ul><li>Explain how companies identify attractive market segments and choose a market coverage strategy. </li></ul><ul><li>Discuss how companies can position their products for maximum competitive advantage in the marketplace. </li></ul>
    3. 3. Steps in Market Segmentation, Targeting, and Positioning (Fig. 7-1)
    4. 4. Step 1. Market Segmentation Levels of Market Segmentation Dividing Markets into Smaller Segments that Can be Reached More Efficiently And Effectively With Products and Services That Match Their Unique Needs. Mass Marketing Same product to all consumers (no segmentation, i.e Coca-Cola at one time) Segment Marketing Different products to one or more segments (some segmentation, i.e. Marriott)
    5. 5. Step 1. Market Segmentation Levels of Market Segmentation Niche Marketing Different products to subgroups within segments (more segmentation, i.e. Standard or Luxury SUV’s) Micromarketing Products to suit the tastes of individuals and locations (complete segmentation) Local Marketing Tailoring brands/promotions to local customer groups, i.e Sears Individual Marketing Tailoring products and programs to the needs of individual customers, i.e. Dell
    6. 6. Step 1. Market Segmentation Geographic Segmentation Density or Climate City or Metro Size World Region or Country
    7. 7. Step 1. Market Segmentation Demographic Segmentation <ul><li>Dividing the market into groups based on variables such as: </li></ul><ul><ul><li>Age </li></ul></ul><ul><ul><li>Life-cycle stage or family size </li></ul></ul><ul><ul><li>Gender </li></ul></ul><ul><ul><li>Income </li></ul></ul><ul><ul><li>Occupation </li></ul></ul><ul><ul><li>Education </li></ul></ul><ul><ul><li>Religion </li></ul></ul><ul><ul><li>Race </li></ul></ul><ul><ul><li>Nationality </li></ul></ul>Most Popular Bases & Easier to Measure
    8. 8. Step 1. Market Segmentation Psychographic Segmentation Social Class Lifestyle Personality Divides Buyers Into Different Groups Based On:
    9. 9. Step 1. Market Segmentation Behavioral Segmentation <ul><li>Dividing the market into groups based on variables such as: </li></ul><ul><ul><li>Occasions </li></ul></ul><ul><ul><li>Benefits sought </li></ul></ul><ul><ul><li>User status </li></ul></ul><ul><ul><li>Usage rate </li></ul></ul><ul><ul><li>Loyalty status </li></ul></ul>
    10. 10. <ul><li>There are many ways to segment a market. Using the four segmentation variables shown in Table 7-1, discuss which variables would be most important for segmenting: </li></ul><ul><ul><li>drivers of a proposed new sports car. </li></ul></ul><ul><li>Explain your choices. </li></ul>
    11. 11. Segmenting Business Markets Operating Characteristics Purchasing Approaches Situational Factors Personal Characteristics Business Marketers Use Many of the Same Consumer Variables, Plus:
    12. 12. Segmenting International Markets May Also Use Intermarket Segmentation Factors Used to Segment International Markets Geographic Location Economic Factors Political and Legal Factors Cultural Factors
    13. 13. Step 1. Market Segmentation Requirements for Effective Segmentation <ul><li>Measurable: size, purchasing power, and profiles of segments can be measured. </li></ul><ul><li>Accessible: segments can be effectively </li></ul><ul><li>reached and served. </li></ul><ul><li>Substantial: segments are large or profitable enough to serve. </li></ul><ul><li>Differential: segments are conceptually distinguishable and respond differently to different marketing mix elements and programs. </li></ul><ul><li>Actionable: effective programs can be designed for attracting and serving the segments. </li></ul>
    14. 14. Step 2. Market Targeting Evaluating Market Segments <ul><li>Segment Size and Growth </li></ul><ul><ul><li>Analyze current segment sales, growth rates, and expected profitability for various segments. </li></ul></ul><ul><li>Segment Structural Attractiveness </li></ul><ul><ul><li>Consider effects of: competitors, availability of substitute products, and the power of buyers & suppliers. </li></ul></ul><ul><li>Company Objectives and Resources </li></ul><ul><ul><li>Examine company skills & resources needed to succeed in that segment(s). </li></ul></ul><ul><ul><li>Offer superior value & gain advantages over competitors. </li></ul></ul>
    15. 15. Step 2. Selecting Market Segments Market Coverage Strategies (Fig. 7-3)
    16. 16. Step 2. Selecting Market Segments Choosing a Market-Coverage Strategy Company Resources Product Variability Product’s Life-Cycle Stage Market Variability Competitors’ Marketing Strategies
    17. 17. Socially Responsible Target Marketing <ul><li>Smart targeting helps companies and consumers alike. </li></ul><ul><li>Target marketing sometimes generates controversy and concern. </li></ul><ul><ul><li>Disadvantaged and vulnerable can be targeted. </li></ul></ul><ul><ul><li>Cereal, cigarette, beer, and fast-food marketers have received criticism in the past. </li></ul></ul><ul><ul><li>Internet has raised fresh concerns about potential targeting abuses. </li></ul></ul>
    18. 18. Step 3. Positioning for Competitive Advantage <ul><li>Product’s Position - the way the product is defined by consumers on important attributes. </li></ul><ul><li>Product is compared with competing products. </li></ul><ul><li>Simplifies the buying process by helping consumers organize products into categories. </li></ul><ul><li>Marketers must: </li></ul><ul><ul><li>Plan positions to give their products the greatest advantage in selected target markets, </li></ul></ul><ul><ul><li>Design marketing mixes to create these planned positions. </li></ul></ul>
    19. 19. Step 3. Choosing a Positioning Strategy Step 2. Choosing the Right Competitive Advantage Step 3. Communicating and Delivering the Chosen Position Step 1. Identifying Possible Competitive Advantages
    20. 20. Identifying Possible Competitive Advantages <ul><li>Key to winning and keeping customers is to understand their needs and buying processes better than competitors do and deliver more value. </li></ul><ul><li>Competitive advantage – extent that a company can position itself as providing superior value to selected target markets. </li></ul>
    21. 21. Identifying Possible Competitive Advantages Services Differentiation i.e. Delivery, Installation, Repair Services, Customer Training Services Product Differentiation i.e. Features, Performance, Style & Design, Attributes People Differentiation i.e. Hiring, Training Better People Than Competitors Do Image Differentiation i.e. Symbols, Characters Channel Differentiation
    22. 22. Volvo <ul><li>This ad demonstrates how Volvo positions on the specific product attribute of safety. </li></ul><ul><li>http://www.volvocars.com </li></ul>
    23. 23. <ul><li>What three major positioning errors should a company strive to overcome? Describe each one. </li></ul>
    24. 24. Choosing the Right Competitive Advantages Criteria For Determining Which Differences To Promote Affordable Superior Profitable Preemptive Distinctive Important Communicable Unique Selling Proposition
    25. 25. Selecting an Overall Positioning Strategy (Fig. 7-4)
    26. 26. Communicating and Delivering the Chosen Position <ul><li>Company must take strong steps to deliver and communicate the desired position to target consumers. </li></ul><ul><li>All the company’s marketing mix must support the positioning strategy. </li></ul><ul><li>Positioning strategy must be monitored and adapted over time to match changes in consumer needs and competitors’ strategies. </li></ul>
    27. 27. Rest Stop: Reviewing the Concepts <ul><li>Define the three steps of target marketing: market segmentation, market targeting, and market positioning. </li></ul><ul><li>List and discuss the major levels of market segmentation and bases for segmenting consumer and business markets. </li></ul><ul><li>Explain how companies identify attractive market segments and choose a market-coverage strategy. </li></ul><ul><li>Discuss how companies can position their products for maximum competitive advantage in the marketplace. </li></ul>
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