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Market Segmentation, Targeting, and Positioning for Competitive Advantage

Market Segmentation, Target Marketing & Market Positioning: Market Segmentation: Dividing a market into smaller groups of buyers distinct needs, characteristics or behavior who might require separate products or marketing mixes. Target Marketing: The process of evaluating each market segments attractiveness and selecting one or more segments to enter. Market Positioning: Arranging for a product to occupy a clear, distinctive and desirable place relative to competing products in the minds of target consumers.

Steps in Segmentation, Steps in Segmentation, Targeting, and Positioning Targeting, and Positioning

6. Develop a Marketing Mix for Each Target Segment 5. Develop Positioning for Each Target Segment 4. Select Target Segment(s ) 3. Develop Measures of Segment Attractiveness 2. Develop Profiles of Resulting Segments 1. Identify Bases for Segmenting the Market

Market Positioning Market Targeting

Market Segmentation

Step 1. Market Segmentation Step 1. Market Segmentation Levels of Market Segmentation Levels of Market Segmentation
Mass Marketing Mass Marketing Same product to all consumers Same product to all consumers (no segmentation) (no segmentation) Segment Marketing Segment Marketing Different products to one or more segments Different products to one or more segments (some segmentation) (some segmentation) Niche Marketing Niche Marketing Different products to subgroups within segments Different products to subgroups within segments (( more segmentation) more segmentation) Micromarketing Micromarketing Products to suit the tastes of individuals or locations Products to suit the tastes of individuals or locations (complete segmentation) (complete segmentation)

Step 1. Market Segmentation Step 1. Market Segmentation Bases for Segmenting Consumer Markets Bases for Segmenting Consumer Markets

Geographic
Nations, states, regions or cities

Demographic
Age, gender, family size and life cycle, or income

Psychographic
Social class, lifestyle, or personality

Behavioral
Occasions, benefits, uses, or responses

Using Multiple Segmentation Bases: Geodemographics


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S a nl itu tio a Fc r a tos

O ea g p r tin C aa teis s h r c r tic

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Ge g ra h ic e o ra p ic Go g p h

Ec n o ic c oom Eo n mic

Po a l/ o litic l/ Plitic a Leal eg l Lga

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Step 1. Market Segmentation Step 1. Market Segmentation Requirements for Effective Segmentation Requirements for Effective Segmentation

Measurable Measurable Accessible Accessible Substantial Substantial Differential Differential Actionable Actionable

Size, purchasing power, profiles of segm ents can be m easured. Segments must be effectively reached and served.

Segments must be large or profitable enough to serve.

Segments m ust respond differently to different marketing mix elements & actions. Must be able to attract and serve the segments.

Step 2. Market Targeting Step 2. Market Targeting Evaluating Market Segments Evaluating Market Segments Segment Size and Growth Analyze sales, growth rates and expected profitability. 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 Look for Competitive Advantages.

segment(s ).

Step 2. M arketTargeting arket Targeting Step 2. M M arketCoverage Strategies arket Coverage Strategies M
Com pany pany Com M arketing arketing M M ix ix M
A Undifferentiated (M . ass) M arketing

M arket arket M

Com pany pany Com M arketingM ix1 arketing M 1 ix M Com pany Company M arketingM ix2 arketing M 2 ix M Com pany pany Com M arketingM ix3 arketing M 3 ix M
B. Differentiated (Segm ented) M arketing

Segm ent1 ent Segm 1 Segm ent2 ent Segm 2 Segm ent3 ent Segm 3

C pany om pany Com M arketing arketing M M ix ix M


C. Concentrated (niche) M arketing

Segm ent1 ent Segm 1 Segm ent2 ent Segm 2 Segm 3 ent Segment 3

Step 2. Market Targeting Step 2. Market Targeting Choosing a Market -Coverage Strategy Choosing a Market -Coverage Strategy
Company Resources Product Variability Product s Stage in the Product Life Cycle Market Variability Competitors Marketing Strategies
Stp3. P s io inffrrCmeit e t e . Po it n g o o pit iv e s io in me S p3 o it n g o Cop ttive Ad aag d a ttg vn e A v na e

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Step 3. Positioning for Competitive Step 3. Positioning for Competitive Advantage: Strategies Advantage: Strategies
Product Product Class Class Away from Away from Competitors Competitors Against a Against a Competitor Competitor Product Product Attributes Attributes Benefits Benefits Offered Offered
D D B B F F

H H

G G C C A A

E E

Usage Usage Occasions Occasions

Users Users

S testoCho s ga n Imp metin g te p h oin g n d p m tin o le n S p stoC os in ad Im le e n g aPoitio n gStra g y o s n in tra tey aPs itioin gS te g

S p1 te . Id n in as t o p s ib c m e e e tify g e f o s le o p titiv a v n g s C m e eD re tia n d a ta e : o p titiv iffe n tio . S p2 te . S le tin th r h c m e ea v n g . e c g e ig t o p titiv d a ta e an d d liv rin th e e g e

S p3 te . E c e c m u ic tin ffe tiv ly o m n a g c o e p s ntoth m rk t. h s n o itio e a e

De lo in gCo p e e ve p in omp titive D ve lop g C me titive Diffe n tia n iffere n tio n D re tia tio
Pro u ct rodu P d ct Se ice erv S rvice

Are s fo rCo p e reas r o me titive A a fo C mp titive Diffe n tia n iffe ren tio n D re tia tio

Pe n e e rso nel P rsonn l

Ima e ag Img e

Selecting the Right Competitive Selecting the Right Competitive Advantages Advantages
Important Important

Profitable Profitable

Affordable Affordable

Criteria for Determining Which Differences to Promote

Distinctive Distinctive

Superior Superior

Preemptive Preemptive

Communicable Communicable