The document outlines Chapter 9 on segmentation, targeting, and positioning in marketing. It discusses the different methods of segmenting a market, how firms evaluate segment attractiveness, and the various targeting and positioning strategies. The chapter provides learning objectives and steps in the segmentation, targeting, and positioning process, and gives examples of segmentation methods like geographic, demographic, and psychographic segmentation.

1. segmentation, targeting, and positioning
nine
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1
Chapter 9 – Segmentation, Targeting, and Positioning
LEARNING OBJECTIVES
LO 9-1 Outline the different methods of segmenting a market.
LO 9-2 Describe how firms determine whether a segment is
attractive and therefore worth pursuing.
LO 9-3 Articulate the differences among targeting strategies:
undifferentiated, differentiated, concentrated, or
micromarketing.
LO 9-4 Determine the value proposition.
LO 9-5 Define positioning and describe how firms do it.
9-‹#›
These are the learning objectives for this chapter.
2
Segmentation, Targeting,
Positioning Process
Step 1
Strategy or Objectives
Step 2

2. Segmentation Methods
Step 3
Evaluate Segment Attractiveness
Step 4
Select Target Market
Step 5
Identify and Develop Positioning Strategy
Segmentation
Targeting
Positioning
9-‹#›
3
Previous chapters addressed how to plan marketing strategy;
this chapter focuses on how firms use that strategy to identify
the target markets they will serve.
Step 1: Establish Overall
Strategy or Objectives
Check Yourself
Derived from mission and current state
©M. Hruby.
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4
Remind students that any strategy must be consistent with the
firm’s mission statement and be based on the current
assessments from SWOT analyses
Step 2: Segmentation MethodsSegmentation MethodSample

3. SegmentsGeographicContinent: North America, Asia, Europe,
Africa
Within U.S.: Pacific, mountain, central, south, mid-Atlantic,
northeastDemographicAge, gender,
incomePsychographicLifestyle, self-concept, self-
valuesBenefitsConvenience, economy,
prestigeBehavioralOccasion, loyalty
9-‹#›
5
Group activity: Divide the class into groups. Have them
choose either a manufacturer or national retailer. Have them
describe their segmentation method and then evaluate whether
or not it is the best segmentation method for that firm.
Geographic Segmentation
©ImagineChina
9-‹#›
6
Geographic information software (GIS) aids in such
segmentation. Many firms use regional brands of popular
products. When Dunkin’ Donuts introduced soup to its menu, it
included New England Clam Chowder which appealed to
northeastern consumers, but franchisees in Texas objected to
this choice. Understanding regional preferences can define a
company’s success — or failure.
Ask students: How can firms successfully change a national
brand into a international brand? This will tie to the previous
chapter on global marketing – should they adapt to local tastes?

4. Demographic Segmentation
Most common segmentation strategy
U.S. Census Bureau Website
©Stockbyte/Getty Images
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7
This web link is to the U.S. Census Bureau. They provide one
of the most important marketing research tools: Census data,
which offer a rich, free source of information about various
consumers that, suggests segmentation possibilities.
On the Census Bureau Website, walk students through the
information available about the zip code in which your
university is located.
Psychographic Segmentation
©Benetton Group SPA; Photo by: Oliviero Toscani
9-‹#›
8
Not just businesses segment their customers; segmentation also
helps organizations that counsel drug addicts or other at-risk
groups. Recall the discussion during the last presidential
election about “hockey moms”—middle-class, educated, married
women concerned about various threats to their children.
Group Activity: Divide students into groups. Have each choose
a product/service they like. Have them describe users of that

5. product/service in terms of psychographics
Psychographic
Self-values
Self-concept
Lifestyles
Geodemographic Segmentation
Claritas Website
Source: Reprinted with permission of The Nielsen Company.
9-‹#›
9
Click on the Claritas link and conduct the “You Are Where You

6. Live” exercise with the zip codes of the students’ hometowns.
Ask students: Describe your neighborhood. How accurately does
the site depict your hometown?
Benefit Segmentation
©image100/PunchStock
©image100/PunchStock
Michael Hevesy/Photodisc/Getty Images
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10
Group activity: Have students identify products that provide
each type of benefit. How else might these products be
segmented?
This activity provides a good opportunity to remind students
that products exist in multiple segments, just as consumers do.
Different motives lead different consumers to purchase the same
product.
Behavioral Segmentation
Royalty-Free/CORBIS
9-‹#›
11
Firms encourage loyalty in various ways, such as airline
mileage or hotel point reward programs.
Ask students: Are you a loyal buyer of any single product, to
the extent that you refuse to purchase a substitute?

7. Students may refer to soft drinks, but true brand loyalty is
extremely rare.
Occasion segmentation
Loyalty segmentation
What are the various segmentation methods?
check yourself
9-‹#›
Geographic, Demographic, Psychographic, Geodemographic,
Benefits, and Behavioral.
Step 3: Evaluate Segment Attractiveness
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13
Marketers first must determine whether the segment is worth
pursuing, using several descriptive criteria: Is the segment
identifiable, substantial, reachable, responsive, and profitable.
SEGMENT ATTRACTIVENESS

8. Substantial
Reachable
Responsive
Profitable
Identifiable
Identifiable
Who is in their market?

9. Are the segments unique?
Does each segment require a unique marketing mix?
Liquidlibrary/Dynamic Graphics/Jupiterimages
Liquidlibrary/Dynamic Graphics/Jupiterimages
Comstock Images/JupiterImages
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14
Ask students: When would these women all be in the same
segment? When would they be in different segments?
These women would appear in the same segment if the
segmentation variable were gender but in individual segments
based on race or lifestyle. They also may be in different
geographic or income segments, for example.
Substantial
Too small and it is insignificant
Too big and it might need it’s own store
©Jerry Arcieri/Corbis
9-‹#›
15
Just because a firm can find a market does not necessarily mean
it represents a good market. But size in terms of number of
people is not the only consideration; despite its small size, the
market for the original Hummer was incredibly profitable, and
therefore was substantial

10. Reachable
©Digital Vision/PunchStock
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16
The Internet has enabled more people to be reached more easily,
but various areas around the world simply cannot be served
because they aren’t accessible to marketing messages or because
there isn’t adequate distribution.
Ask students: What types of media influence the way they
shop? The answer may lead to an interesting discussion about
how difficult it is to reach Generation Y customers either
because they don’t participate in traditional media such as
newspapers or because they are skeptical about being influenced
by commercial messages.
Know the product exists
Understand what it can do
Recognize how to buy

11. Responsive
Customers must:
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17
Group activity: Nike is very successful at selling sports related
goods. Would consumers accept personal care products from
Nike? Why or why not? Develop a list of potential products for
Nike.
Ask students: Are any of the following acceptable: cologne,
deodorant, toothpaste, or hair gel. Why or why not? What about
Nike towels, sheets, or pajamas? What differences can you
identify between these two types of product categories?
Students are likely to say they will not understand the value
proposition and the company’s expertise. Yet other students
might say that they will believe in personal care product
because Nike offers superior products.
React positively to firm’s offering
Move toward the firms products/services
Accept the firm’s value proposition

12. ProfitableHomeownersBusinessesSegment
size75,0001,000Segment adoption percentage1%20%Purchase
behavior
Purchase price
Frequency of purchase$100
12 times$500
20 timesProfit margin percentage60%80%Fixed
costs$400,000$1,000,000Segment profit$140,000$600,000
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18
A hot segment today may not last long enough to make it worth
investment. Many firms are investigating when and how much
to invest in the Millennial/GenY generational cohort. Firms in
financial services and housing understand that it provides a new
potential market, but the debt levels this segment carries makes
it difficult to target effectively.
Step 4: Selecting a Target Market
Conde Nast has more than 20 niche magazines focused on
different aspects of life.
©M Hruby
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19
Hallmark looks at geographic segmentation when building new
stores. They also use benefit segmentation for their online
cards. In general, a company matches their competencies with

13. the attractiveness of target markets.
Segmentation Strategy
9-‹#›
20
Ask students: What is an example of a mass market product?
Answer: There are very few mass market products. Even
commodity goods such as flour are now differentiated.
Ask students: What are examples of products that use
differentiated, concentrated, and micromarketing segmentation
strategies?
Differentiated = Coca Cola
Concentrated = Helena Rubenstein or Clinique
Microtargeting = Financial Services Providers
Targeting Strategies
Differentiated
Concentrated
Micromarketing
or
one-to-one
Undifferentiated or
mass marketing

14. Step 5: Develop Positioning Strategy
Photo by Tiffany Rose/WireImage/Getty Images
9-‹#›
Positioning strategies generally focus on either how the product
or service affects the consumer or how it is better than
competitors’ products and services.
When positioning against competitors, the objective is to play
up how the brand being marketed provides the desired benefits
better than do those of competitors.
Firms thus position their products and services according to
value, salient attributes, and symbols, and against competition.
Salient Attributes
Positioning Methods

15. Symbol
Competition
Value
Positioning Steps
9-‹#›
22
This slide provides the steps necessary to develop the
positioning map on the next slide. Switch back and forth on
these two slides to explain the positioning map.
1. Determine consumers’ perceptions and evaluations in relation
to competitors’.
2. Identify the market’s ideal points and size.

16. 4. Determine consumer preferences.
5. Select the position.
6. Monitor the positioning strategy.
3. Identify competitors’ positions.
Perceptual Maps
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23
This perceptual map was created by the process on the previous
page. It was for Gatorade which was seeking a positioning of
healthy and sweet taste.
What is a perceptual map?
Identify the six positioning steps.

17. check yourself
9-‹#›
A perceptual map displays, in two or more dimensions, the
position of products or brands in the consumer’s mind.
Determine consumers’ perceptions and evaluations of the
product or service in relation to competitors’, identify
competitors’ positions, determine consumer preferences, select
the position, monitor the positioning strategy.
Benefit segmentation groups consumers on the basis of the
benefits they derive from products or services.
Glossary
Return to slide
9-‹#›
Benefit segmentation groups consumers on the basis of the
benefits they derive from products or services.
Demographic segmentation groups consumers according to
easily measured, objective characteristics such as age, gender,
income, and education.
Glossary
Return to slide
9-‹#›
Demographic segmentation groups consumers according to
easily measured, objective characteristics such as age, gender,
income, and education.

18. Geodemographic segmentation uses a combination of
geographic, demographic, and lifestyle characteristics to
classify consumers.
Glossary
Return to slide
9-‹#›
Geodemographic segmentation uses a combination of
geographic, demographic, and lifestyle characteristics to
classify consumers.
Geographic segmentation organizes customers into groups on
the basis of where they live.
Glossary
Return to slide
9-‹#›
Geographic segmentation organizes customers into groups on
the basis of where they live.
Behavioral segmentation divides customers into groups based
on how they use the product or service.
Glossary
Return to slide
9-‹#›
Behavioral segmentation divides customers into groups based
on how they use the product or service.

19. Psychographic segmentation, or psychographics, allows people
to describe themselves using characteristics that help them
choose how they occupy their time (behavior) and what
underlying psychological reasons determine these choices.
Glossary
Return to slide
9-‹#›
Psychographic segmentation, or psychographics, allows people
to describe themselves using characteristics that help them
choose how they occupy their time (behavior) and what
underlying psychological reasons determine these choices.
The Value and Lifestyle Survey (VALS) is a psychographic tool
that classifies consumers into eight categories based on their
answers to a questionnaire.
Glossary
Return to slide
9-‹#›
The Value and Lifestyle Survey (VALS) is a psychographic tool
that classifies consumers into eight categories based on their
answers to a questionnaire.
BUS 599
DISCUSION 1
"Company Description"
Throughout this course, you will develop a series of written
papers / projects that you will later combine into a complete
business plan for a Non-Alcoholic Beverage company. For this
discussion, you must first review the “NAB Company

20. Portfolio”. The mentioned portfolio contains the company
parameters and details you must follow when developing your
company. Provide the following information to set the
foundation for your non-alcoholic beverage (NAB) business
plan.
Please respond to the following:
· Create your NAB company name and explain its significance.
· Develop your company’s Mission Statement and provide a
rationale for its components.
https://www.kaltura.com/index.php/extwidget/preview/partner_i
d/956951/uiconf_id/29018381/embed/iframe?&flashvars[stream
erType]=auto&flashvars[playlistAPI.kpl0Id]=1_tkcv6tz7
DISCUSSION 2
"Growing Honest Tea" Please respond to the following:
· Review the following documents:
·
· Honest Tea’s business plan for 1999 (PDF).
· A strengths, weaknesses, opportunities, and threats (SWOT)
analysis based on Honest Teas’ business plan (PDF).
· Suppose Honest Tea has hired you as a consultant to evaluate
the completeness of their strategy for future growth. Base your
evaluation on the provided SWOT analysis. Provide a rationale
for your response.
https://blackboard.strayer.edu/bbcswebdav/institution/BUS/599/
1154/Week2/W2_Honest_Tea_Business_Plan_98.pdf
https://blackboard.strayer.edu/bbcswebdav/institution/BUS/599/
1154/Week2/W2_Honest%20Tea%20SWOT%20Analysis_Stude
ntVersion.docx
DISCUSSION 3
Watch the following video
https://www.youtube.com/watch?v=lYX04wiMYmQ
https://www.youtube.com/watch?v=0-4ivPwMDCE
There are two (2) very different target markets and sales forces
discussed in the videos. Identify some of the key differences
between the organizations’ sales forces and target markets.
Explain the value of developing a sales force based on the target

21. market. Use examples from each video to support your response
PART 2
ASSIGNMENT
Before you get started on this assignment, watch the video
below for some helpful tips on completing Assignment 1.
https://www.kaltura.com/index.php/extwidget/preview/partner_i
d/956951/uiconf_id/29018381/embed/iframe?&flashvars[stream
erType]=auto&flashvars[playlistAPI.kpl0Id]=1_th4xgh8l
Assignment 1: Company Description and SWOT Analysis
Due Week 3
In this assignment, you will conduct a SWOT (Strength,
Weakness, Opportunity, and Threat) analysis for the type of
beverage you have selected, and for your company overall. As
you work on the assignment, consider why you have chosen one
type of non-alcoholic beverage over another and the reasons for
that choice. As you complete your SWOT analysis, be sure to
include external factors such as industry / market trends and
competition, and internal factors such as your capabilities or
abilities to reach certain market segments.
Write a three to five (3-5) page paper, in which you:
1. Create your revised NAB company name and explain its
significance.
2. Develop your revised company’s Mission Statement and
provide a rationale for its components.
· Hints: Use the Statement of Mission template on pp. 72-73 on
the course textbook: Successful Business Plan to aid your
development.Click here for help accessing a specific page
number in your eBook.
· Extracting appropriate information from the NAB company
portfolio, where applicable. You should fill in other required
items in the template using your personal preferences.
3. Describe the trends in the non-alcoholic beverage industry,
especially the specific type of beverage category you have
chosen. Justify at least three (3) reasons why you have chosen
this type of non-alcoholic beverage.

22. · Hints: Research and outline beverage industry trends.
Consider the size and growth rate of the industry overall and the
specific beverage type you have chosen. Use the worksheet in
the course text (p. 88 | Past and Future Growth of Your
Industry) to help you project the future growth rate. Consider
the use of industry associations and search engines to find
reliable, recent data.
4. Choose one (1) strategic position from the course text (pp.
142–143) that you believe is the best strategic position for your
company. Explain the approach you will use to implement this
strategic position in order to distinguish your beverage from
other non-alcoholic beverages.
5. Provide an overview of your company’s distribution
channels. Explain the manner in which your product will reach
end users. Provide a rationale for your chosen method.
· Hints: For example, will you sell your beverage in grocery
stores, restaurants, or sports venues? If so, describe the types of
resellers and distributors who will sell to resellers and fulfill
their orders. If you are attempting to sell direct-to-consumers,
such as online via a monthly subscription, how will you manage
warehousing / fulfillment / shipping?
6. Outline at least three (3) types of risks (including any
regulatory risks) that your business faces. Describe your
company’s plan to mitigate such risk.
· Hints: You may refer to the types of risk listed in the course
text (pp. 148–149) as well as any risks not listed in the text.
Regulation weighs more heavily on beverage and food
businesses than many other types of companies, so be certain to
consider any regulatory risks your type of beverage faces. For
example, what kind of regulation and / or risks are you likely to
face if you make health claims about your beverage?
7. Develop a SWOT analysis for your NAB company using the
SWOT matrix worksheet in the course text (p. 153 | SWOT:
Strengths / Weaknesses / Opportunities / Threats)
· Hints: What are your company’s likely strengths? Have you
chosen a beverage segment that is growing and lacks an

23. entrenched competitor? Are you in a niche market that has great
potential? What are the strengths that you and other team
members bring to your company? Do you or other team
members have previous experience in the food and beverage
industry?
· Hints: What are your company’s likely weaknesses? Is the
competition in your industry segment entrenched? Is your own
management team inexperienced? Will it be challenging to
actually produce your product and maintain quality?
· Hints: What are your company’s opportunities? Does your
segment have more demand than supply? Have larger
corporations stopped serving smaller or niche markets that you
could enter? Is a new market emerging because of
demographics, immigration, changing tastes?
· Hints: What are your company’s threats? Is there a clear
market leader that will be hard and expensive to displace? Are
downward-pricing pressures in the segment making profit
margins slim? Are there little or no barriers-to-entry for new
competitors; if you have a novel idea that succeeds, can the
competition easily enter your market? If you have a global
aspect to your company, do factors such as currency
fluctuations, political instability, offshoring or outsourcing pose
threats?
8. Format your assignment according to these formatting
requirements:
a. Be typed, double spaced, using Times New Roman font (size
12), with one-inch margins on all sides; references must follow
APA or school-specific format. Check with your professor for
any additional instructions.
b. Include a cover page containing the title of the assignment,
the student’s name, the professor’s name, the course title, and
the date. The cover page and the reference page are not included
in the required page length.
c. Cite the resources you have used to complete the exercise.
Note: There is no minimum requirement for the number of
resources used in the exercise.

24. The specific course learning outcomes associated with this
assignment are:
· Analyze the role of a company mission, vision, and objectives
and the impact to business strategy.
· Describe strategic planning techniques used to formulate
alternative strategies designed to achieve stated business goals.
· Analyze the external and internal environment for
opportunities, threats, strengths, and weaknesses that impact the
firm’s competitiveness.
· Use technology and information resources to research issues in
strategic management.
· Write clearly and concisely about strategic management using
proper writing mechanics.
ECONOMICS
DISCUSSION 1
"Supply and Demand" Please respond to the following:
· From the scenario for Katrina’s Candies, examine the key
factors affecting the demand for and the supply of a good in
general and Katrina’s Candies specifically. Distinguish between
a change in demand and a change in the quantity demanded
(movement along the demand curve). Propose two (2) methods
in which organizations that provide the good may utilize this
information.
DISCUSSION 2
"Estimating Demand and Its Elasticities" Please respond to the
following:
· From the scenario for Katrina’s Candies, examine the
procedure Herb will use to estimate the demand model
developed in the scenario for Week 1. Analyze the elasticity of
demand for products within the selected industry relevant to
Katrina’s Candies. Determine the factors involved in making
decisions about pricing these products that you believe to be the
most influential.
DISCUSSION 3
"Managing in the Global Economy and Outsourcing Offshore"

25. Please respond to the following:
· From the scenario for Katrina’s Candies, assuming the absence
of quantitative data, determine the qualitative forecasting
techniques that could be used within this scenario. Now, assume
you have acquired some time series data that would enable you
to make forecasts. Ascertain the quantitative technique that will
provide you with the most accurate forecast.
· When deciding whether or not to outsource offshore, list the
key factors aside from maximizing profits that managers should
consider. Determine the key factors that you believe to be the
most influential.
PART 2
ASSIGNMENT 1
Assignment 1: Demand Estimation
Due Week 3
Imagine that you work for the maker of a leading brand of low-
calorie, frozen microwavable food that estimates the following
demand equation for its product using data from 26
supermarkets around the country for the month of April.
For a refresher on independent and dependent variables, please
go to Sophia’s Website and review the Independent and
Dependent Variables tutorial, located at
http://www.sophia.org/tutorials/independent-and-dependent-
variables--3.
Option 1Note: The following is a regression equation. Standard
errors are in parentheses for the demand for widgets.
QD = - 5200 - 42P + 20PX + 5.2I + 0.20A + 0.25M
(2.002) (17.5) (6.2) (2.5) (0.09) (0.21)
R2 = 0.55 n = 26 F = 4.88
Your supervisor has asked you to compute the elasticities for
each independent variable. Assume the following values for the
independent variables:
Q = Quantity demanded of 3-pack units
P (in cents) = Price of the product = 500 cents per 3-
pack unit

26. PX (in cents) = Price of leading competitor’s product =
600 cents per 3-pack unit
I (in dollars) = Per capita income of the standard
metropolitan statistical area
(SMSA) in which the supermarkets are located = $5,500
A (in dollars) = Monthly advertising expenditures =
$10,000
M = Number of microwave ovens sold in the
SMSA in which the
supermarkets are located = 5,000
Option 2Note: The following is a regression equation. Standard
errors are in parentheses for the demand for widgets.
QD = -2,000 - 100P + 15A + 25PX + 10I
(5,234) (2.29) (525) (1.75) (1.5)
R2 = 0.85 n = 120 F = 35.25
Your supervisor has asked you to compute the elasticities for
each independent variable. Assume the following values for the
independent variables:
Q = Quantity demanded of 3-pack units
P (in cents) = Price of the product = 200 cents per 3-
pack unit
PX (in cents) = Price of leading competitor’s product =
300 cents per 3-pack unit
I (in dollars) = Per capita income of the standard
metropolitan statistical area
(SMSA) in which the supermarkets are located = $5,000
A (in dollars) = Monthly advertising expenditures =
$640
Write a four to six (4-6) page paper in which you:
1. Compute the elasticities for each independent variable. Note:
Write down all of your calculations.
2. Determine the implications for each of the computed
elasticities for the business in terms of short-term and long-term
pricing strategies. Provide a rationale in which you cite your
results.
3. Recommend whether you believe that this firm should or

27. should not cut its price to increase its market share. Provide
support for your recommendation.
4. Assume that all the factors affecting demand in this model
remain the same, but that the price has changed. Further assume
that the price changes are 100, 200, 300, 400, 500, 600 cents.
a. Plot the demand curve for the firm.
b. Plot the corresponding supply curve on the same graph using
the following MC / supply function Q = -7909.89 + 79.1P with
the same prices.
c. Determine the equilibrium price and quantity.
d. Outline the significant factors that could cause changes in
supply and demand for the low-calorie, frozen microwavable
food. Determine the primary manner in which both the short-
term and the long-term changes in market conditions could
impact the demand for, and the supply, of the product.
5. Indicate the crucial factors that could cause rightward shifts
and leftward shifts of the demand and supply curves for the
low-calorie, frozen microwavable food.
6. Use at least three (3) quality academic resources in this
assignment. Note: Wikipedia does not qualify as an academic
resource.
Your assignment must follow these formatting requirements:
· Be typed, double spaced, using Times New Roman font (size
12), with one-inch margins on all sides; citations and references
must follow APA or school-specific format. Check with your
professor for any additional instructions.
· Include a cover page containing the title of the assignment, the
student’s name, the professor’s name, the course title, and the
date. The cover page and the reference page are not included in
the required assignment page length.
The specific course learning outcomes associated with this
assignment are:
· Analyze how production and cost functions in the short run
and long run affect the strategy of individual firms.
· Apply the concepts of supply and demand to determine the
impact of changes in market conditions in the short run and long

28. run, and the economic impact on a company’s operations.
· Use technology and information resources to research issues in
managerial economics and globalization.
· Write clearly and concisely about managerial economics and
globalization using proper writing mechanics.