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Marketing Segmentation, Targeting and Positioning
- 1. Principles of Marketing MKT3010 Chapter 9 Segmentation, Targeting, and Positioning Patricia Knowles, Ph.D. Associate Professor Clemson University 1
- 2. 2 Principles of Marketing MKT3010 2 Segmentation, Targeting, and Positioning These are the learning objectives guiding the chapter and will be explored in more detail in the following slides. Outline the different methods of segmenting a market. Describe how firms determine whether a segment is attractive and therefore worth pursuing. Articulate the difference among targeting strategies: undifferentiated, differentiated, concentrated, or micromarketing. Determine the value proposition. Define positioning, and describe how firms do it. LO1 LO2 LO3 LO4 LO5
- 3. 33 Segmentation, Targeting, and Positioning Process 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. Principles of Marketing MKT3010 Step 1 •Strategy or Objectives Step 2 •Segmentation Methods Step 3 •Evaluate Segment Attractiveness Step 4 •Select Target Market Step 5 •Identify and Develop Positioning Strategy Segmentation Targeting Positioning
- 4. 44 Step 1: Establish Overall Strategy or Objectives Principles of Marketing MKT3010 Any strategy must be consistent with the firm’s mission statement and be based on the current assessments from SWOT analyses. Check Yourself Derived from mission and current state ©M. Hruby.
- 5. 55 Step 2: Segmentation Methods Principles of Marketing MKT3010
- 6. 66 Check Yourself Principles of Marketing MKT3010 1. What are the various segmentation methods?
- 7. 77 Step 3: Evaluate Segment Attractiveness Principles of Marketing MKT3010 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 Substantial Reachable ResponsiveProfitable Identifiable
- 8. 88 Identifiable Principles of Marketing MKT3010 • Who is in their market? • Are the segments unique? • Does each segment require a unique marketing mix? Liquidlibrary/Dynamic Graphics/Jupiterimages Liquidlibrary/Dynamic Graphics/Jupiterimages Comstock Images/JupiterImages
- 9. 99 Principles of Marketing MKT3010 Substantial • Too small and it is insignificant • Too big and it might need it’s own store ©JerryArcieri/Corbis 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. 1010 Principles of Marketing MKT3010 Reachable 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. Know the product exists Understand what it can do Recognize how to buy ©Digital Vision/PunchStock
- 11. 1111 Responsive Principles of Marketing MKT3010 React positively to firm’s offering Move toward the firms products/services Accept the firm’s value proposition Customers must:
- 12. 1212 Profitable Principles of Marketing MKT3010 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.
- 13. 1313 Step 4: Selecting a Target Market Principles of Marketing MKT3010 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 the attractiveness of target markets. • Conde Nast has more than 20 niche magazines focused on different aspects of life. ©M Hruby
- 14. 1414 Segmentation Principles of Marketing MKT3010 Targeting Strategies Differentiated Concentrated Micromarketing or one-to-one Undifferentiated or mass marketing
- 15. 1515 Step 5: Develop Positioning Strategy Principles of Marketing MKT3010 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. • Value • Salient Attributes • Symbol • Competition Positioning Methods Photo by Tiffany Rose/WireImage/Getty Images
- 16. 1616 Positioning Steps Principles of Marketing MKT3010 1. Determine consumers’ perceptions and evaluations in relation to competitors’. 2. Identify the market’s ideal points and size. 3. Identify competitors’ positions. 4. Determine consumer preferences. 5. Select the position. 6. Monitor the positioning strategy.
- 17. 1717 Check Yourself Principles of Marketing MKT3010 1. What is a perceptual map? 2. Identify the six positioning steps.
- 18. 1818 Glossary Principles of Marketing MKT3010 Behavioral segmentation divides customers into groups based on how they use the product or service. 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. 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. 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. Value and Lifestyle Survey (VALS) is a psychographic tool that classifies consumers into eight categories based on their answers to a questionnaire.