Segmentation Targeting and Positioning Copyright 2005 Pearson Education

Segmentation, Targeting and Positioning: Copyright © 2005 Pearson Education Inc. Building the Right Relationships with the Right Customers • Chapter 9 • Power. Point slides • Express version • Instructor name • Course name • School name • Date Principles of of Marketing, Sixth Canadian Edition

Learning Objectives 2 Copyright © 2005 Pearson Education Inc. • After studying this chapter, you should be able to: – Define three steps of target marketing: market segmentation, target marketing, and market positioning – List and discuss the bases for segmenting consumer and business markets – Explain how companies identify attractive market segments and choose a market coverage strategy – Discuss how companies position their products for maximum competitive advantage in the marketplace Principles of Marketing, Sixth Canadian Edition

Steps in Market Segmentation, Targeting, and Positioning 3 • Market segmentation: dividing market into distinct groups Copyright © 2005 Pearson Education Inc. which will require separate marketing mixes • Target marketing: choosing which group(s) to appeal to • Market positioning: creating a clear, distinctive position in the consumer’s mind relative to competition Figure 9. 1 Principles of Marketing, Sixth Canadian Edition

Consumer Market Segmentation (Table 9. 1) Copyright © 2005 Pearson Education Inc. • Geographic: – Regions – Size/density – Climate • Demographic: – – – – Age/generation Gender Family size/life-cycle Income Occupation Religion Ethnic origin 4 • Psychographic: – Social class – Lifestyle – Personality • Behavioral: – – – – Occasions Benefits User status Usage rate Loyalty status Readiness state Attitude toward product Principles of Marketing, Sixth Canadian Edition

Business Markets Segmentation (Table 9. 2) Copyright © 2005 Pearson Education Inc. • Demographic: • Purchasing approaches: – Industry – Company size – Location • Operating variables: – Technology – User/non-user status – Customer capabilities • Situational factors: – Urgency – Specific application – Size of order 5 – – – Purchasing organization Power structure Existing relationships General policies Purchasing criteria • Personal characteristics: – Buyer-seller similarity – Attitude towards risk – Loyalty Principles of Marketing, Sixth Canadian Edition

Segmenting International Markets 6 Copyright © 2005 Pearson Education Inc. • International markets can be segmented by: – – Geographic location Economic factors Political and legal factors Cultural factors • Intermarket segmentation: – Forming segments of consumers who have similar needs, even though they live in different countries Principles of Marketing, Sixth Canadian Edition

Requirements for Effective Segmentation 7 Copyright © 2005 Pearson Education Inc. • To be useful, market segments must be: – Measurable: • Size, purchasing power, and profiles can be measured – Accessible: • Segments can be reached – Substantial: • Large enough to be profitable – Actionable: • Programs can be developed to attract and serve the segments Principles of Marketing, Sixth Canadian Edition

8 Copyright © 2005 Pearson Education Inc. Target Marketing Strategies • Three factors used to evaluate segments: – Segment size and growth – Structural attractiveness • Competition, substitute products, power of buyers/suppliers – Company objectives and resources Figure 9. 2 Principles of Marketing, Sixth Canadian Edition

Copyright © 2005 Pearson Education Inc. Choosing a Target Marketing Strategy 9 • Factors to be considered: – Company resources – Product variability – Product’s life-cycle stage – Market variability – Competitor’s marketing strategies Principles of Marketing, Sixth Canadian Edition

Positioning for Competitive Advantage 10 • Product position: the way the product is defined by consumers Copyright © 2005 Pearson Education Inc. on important attributes, relative to competing products • Competitive advantage: an advantage gained over competitors by offering (and delivering) greater value • Sources of differentiation: – – – Product Service Marketing channels People Image Principles of Marketing, Sixth Canadian Edition

Which Differences to Promote? 11 • Unique selling proposition (USP): aggressively promoting Copyright © 2005 Pearson Education Inc. one benefit to the target audience • Three major positioning errors: – Under-positioning – Over-positioning – Confused positioning • Differences should be: – – – – Important Distinctive Superior Communicable Pre-emptive Affordable Profitable Principles of Marketing, Sixth Canadian Edition

12 Possible Value Propositions Copyright © 2005 Pearson Education Inc. • Value proposition: Figure 9. 3 – Full positioning of a brand – Mix of benefits used for positioning Principles of Marketing, Sixth Canadian Edition

In Conclusion… 13 Copyright © 2005 Pearson Education Inc. • The learning objectives for this chapter were: – Define three steps of target marketing: market segmentation, target marketing, and market positioning – List and discuss the bases for segmenting consumer and business markets – Explain how companies identify attractive market segments and choose a market coverage strategy – Discuss how companies position their products for maximum competitive advantage in the marketplace Principles of Marketing, Sixth Canadian Edition