2. Learning Objectives:
•Learn the three steps of marketing, market segmentation, target
marketing, and market positioning.
•Understand the major bases for segmenting consumer and
business marketing strategy.
•Know how companies identify attractive market segments and
choose market strategy.
•Realize how companies position their products for maximum
competitive advantage in the marketplace.
3. Target Market
A market is a set of all actual and potential buyers
A target market is a group of people toward whom
a firm markets its goods, services, or ideas with a
strategy designed to satisfy their specific needs
and preferences.
Any marketing strategy must include a detailed
(specific) description of this.
5. The STP Process
Segmentation is the process of classifying
customers into groups which share some common
characteristics.
Targeting involves the process of evaluating each
segments attractiveness and selecting one or more
segments to enter.
Positioning is arranging for a product to occupy a
clear, distinctive and desirable place relative to
competing products in the mind of the consumer.
6. - dividing a market into distinct groups with distinct
needs, characteristics, or behavior who might require
separate products or marketing mixes.
7. Advantages of Segmentation
1. The process of breaking up a homogeneous market
into heterogeneous segments forces the marketer
to analyse and consider both the needs of the
market and the company’s ability to competently
serve those needs – thereby making the company
better informed about its customers
2. Competitor offerings and marketing positioning
must also be analysed in this context so the
company must consider what its competitive
advantages and disadvantages are, helping it to
clarify its own positioning strategy
3. Limited resources are used to best advantage,
targeted at those segments that offer the best
potential
8. • Size, purchasing power, profiles
of segments can be measured.
• Segments can be effectively
reached and served.
• Segments are large or
profitable enough to serve.
Measurable
Accessible
Substantial
Differential
Actionable
• Segments must respond
differently to different marketing
mix elements & programs.
• Effective programs can be
designed to attract and serve
the segments.
Requirements for Effective Segmentation
9. Steps in Segmentation, Targeting, and Positioning
1. Identify Bases
for Segmenting the Market
2. Develop Profiles
of Resulting Segments
3. Develop Selection Criteria
4. Select Target
Segment(s)
5. Develop Positioning
for Each Target Segment
6. Develop Marketing
Mix for Each Target Segment Market
Positioning
Market
Targeting
Market Segmentation
10. Step 1. Market Segmentation
Levels of Market Segmentation
Mass Marketing
Same product to all consumers
(no segmentation)
Segment Marketing
Different products to one or more segments
(some segmentation)
Micromarketing
Products to suit the tastes of individuals and locations
(one complete segmentation)
Niche Marketing
Different products to subgroups within segments
(more segmentation)
Local Marketing
Tailoring brands/ promotions
to local customer groups
Individual Marketing
Tailoring products/ programs
to individual customers
11. Mass Marketing:
1. Mass Marketing, Mass producing, mass distributing
and mass promoting the same product in the same way
to all consumers.
2. Largest potential market helps lower costs equaling
lower prices or higher margins.
3. Difficult to access fragmented markets.
4. Problems in selecting from multiple ad media and
distribution channels.
12. Segment Marketing:
1. Marketing recognizes buyers differ in needs,
perceptions, and buying behaviors Isolate broad
segments comprising a market.
2. Adapt offers to best match segment needs.
3. Market more efficiently and effectively.
4. More focus and less competition.
13. Niche Marketing:
1. Marketing that focuses on subgroups within large
identifiable groups in a market.
2. Dividing a segment into subsegments.
3. Defining group with distinctive set of traits seeking
special combination of benefits.
4. Price premium.
5. Few or no significant competitors
6. Improves focus of limited resources.
14. Micro Marketing:
1. Tailoring products and marketing programs to suit the tastes
of specific individuals or locations.
2. Local marketing: i)Local tailoring of brands and promotions;
ii)Overcomes regional differences –“First-line customers”;
iii)Dilutes brand image and operation efficiency; iv)Logistical
problems.
3. Individual marketing: i)Tailoring products and marketing
programs to the needs and preferences of individual
customers; ii)Mass customization; iii)Custom-made
products; iv)Self-marketing.
15. Step 1. Market Segmentation
Bases for Segmenting
Consumer Markets
Geographic
Demographic
Age, gender, family size
and life cycle,
or income
Psychographic
Social class, lifestyle,
or personality
Behavioural
Occasions, benefits
sought, user status,
usage rate, loyalty
Nations, states,
regions or cities
16. Step 1. Market Segmentation
Bases for Segmenting Business Markets
Bases
for Segmenting
Business
Markets
Demographics
Personal
Characteristics
Situational
Factors
Operating
Characteristics
Purchasing
Approaches
17. Segmenting Business Markets
• Demographic Segmentation
- industry, company size, location
• Operating Variables
- technology, usage status, customer capabilities
• Purchasing approaches
• Situational factors
- urgency, specific application,
size of order
• Personal characteristics
- buyer-seller similarity, attitudes
toward risk, loyalty
18. Step 1. Market Segmentation
Bases for Segmenting International Markets
Political/
Legal
Cultural Intermarket
Economic
Geographic
Industrial Markets
19. Segmenting International Markets
•Geographic segmentation
- location or region
•Economic factors
- population income or level of economic development
•Political and legal factors
- type/stability of government, monetary regulations, amount of
bureaucracy, etc.
•Cultural factors
- language, religion, values, attitudes, customs, behavioral patterns
20. Consists of a set of buyers who share common needs or
characteristics that the company decides to serve
21. Step 2. Market Targeting
Evaluating Market Segments (developing
selection criteria)
Segment Size and Growth
Analyse sales, growth rates and expected profitability for
various segments.
Segment Structural Attractiveness
Consider effects of: Competitors, Availability of Substitute
Products and, the Power of Buyers & Suppliers.
Company Objectives and Resources
Company skills & resources relative to the segment(s).
Look for Competitive Advantages.
22. Segment 1
Segment 2
Segment 3
Segment 1
Segment 2
Segment 3
Company
Marketing
Mix
Company
Marketing
Mix
Company
Marketing Mix 1
Company
Marketing Mix 2
Company
Marketing Mix 3
Market
A. Undifferentiated Marketing
B. Differentiated Marketing
C. Concentrated Marketing
Step 2. Market Targeting
Market Coverage Strategies
24. Step 3. Positioning for Competitive
Advantage
Market Positioning/Product’s Position - the way the
product is defined by consumers on important attributes
the place the product occupies in consumers’ minds relative to
competing products.
• Involves implanting the brand’s unique benefits and differentiation in
the customer’s mind
• Positioning maps that plot perceptions of brands are commonly used
Marketers must:
Plan positions to give their products the greatest advantage in
selected target markets,
Design marketing mixes to create these planned positions.
25. Step 3. Positioning for Competitive
Advantage: Strategies
Against a
Competitor
Usage
Occasions
Away from
Competitors
Product
Attributes
Product
Class
Benefits
Offered
User Class
B
A
E
D
C
H
G
F
26. Steps to Choosing and Implementing
a Positioning Strategy
Step 1. Identifying Possible Competitive
Advantages: Competitive Differentiation.
Step 2. Selecting the Right Competitive
Advantage: Unique Selling Proposition (USP).
Step 3. Communicating and Delivering the
Chosen Position.
Step 4. Support the positioning strategy with a
unique marketing mix
27. Step 1. Identifying Possible Competitive Advantages: Competitive
Differentiation
Product Service
Image People
Areas for Competitive
Differentiation
Channels
28. Step 2. Selecting the Right Competitive Advantage: Unique
Selling Proposition (USP)
Criteria
for
Determining
which
Differences
to
Promote
Affordable Superior
Profitable
Preemptive
Distinctive
Important
Communicable
29. Step 3. Communicating and Delivering the Chosen Position
Companies must be certain to DELIVER their
value propositions.
Positions must be monitored and adapted over
time.
30. Step 4 – Supporting the positioning
strategy
At this stage the company has decided on its
positioning strategy and must now design a
marketing mix to support this strategy.
