The document discusses market segmentation, targeting, and positioning. It describes how markets can be segmented based on geographic, demographic, psychographic, and behavioral factors. Effective segmentation requires segments to be measurable, accessible, substantial, and actionable. Positioning strategies involve differentiating products based on attributes and image. Selecting the right positioning avoids underpositioning, overpositioning, or creating a confused image.

1. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Chapter 8
Market
Segmentation,
Targeting, and
Positioning
Dr. John V. Padua

2. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Chapter Objectives
• Explain market segmentation and
identify several possible bases for
segmenting markets
• List and distinguish among the
requirements for effective segmentation
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

3. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Chapter Objectives
• Illustrate the concept of positioning for
competitive advantage
• Discuss choosing and implementing a
positioning strategy
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

4. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Markets
• A market is all actual and potential
buyers of a product or service
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

5. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Market Segmentation
• Geographic Segmentation
• Demographic Segmentation
• Psychographic Segmentation
• Behavior Segmentation
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

6. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Geographic Segmentation
• Dividing the market into different
geographic units
– Nations
– States
– Regions
– Counties
– Cities
– Neighborhoods
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

7. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Demographic Segmentation
• Dividing the market into groups based
on demographic variables
– Age
– Gender
– Income
– Occupation
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

8. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Psychographic Segmentation
• Dividing buyers into different groups
based on social class, lifestyle, and
personality characteristics
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

9. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Behavior Segmentation
• Buyers are divided into groups based on their
knowledge, attitude, and use or response to a
product
• The best starting point for building market segments
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

10. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Requirements for Effective
Segmentation
• Measurability
• Accessibility
• Substantiality
• Actionability
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

11. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
• Size, purchasing power, profiles
of segments can be measured.
• Segments can be effectively
reached and served.
• Segments are large or profitable
enough to serve.
MeasurableMeasurable
AccessibleAccessible
SubstantialSubstantial
ActionableActionable
• Effective programs can be
designed to attract and serve
the segments.
Requirements for Effective
Segmentation
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

12. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Positioning Strategies
• Products can be positioned on specific
attributes or against another product
class
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

13. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Product Differentiation
• Physical Attribute Differentiation
• Service Differentiation
• Personnel Differentiation
• Location Differentiation
• Image Differentiation
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

14. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Selecting the Right
Competitive Advantages
• Avoid:
– Underpositioning - failing ever to 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
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

15. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Positioning Measurement
• Perceptual mapping is a research tool
used to measure a brand’s position
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens