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Targeting, and
Positioning
Chapter 8
Objectives
Be able to define the three steps
of target marketing: market
segmentation, target marketing,
and market positioning.
Understand the major bases for
segmenting consumer and
business markets.
8- 2
Objectives
Know how companies identify
attractive market segments
and how they choose a target
marketing strategy.
Comprehend how companies
position their products for
maximum competitive
advantage.
8- 3
Procter &
c Gamble
Sells multiple
brands within the
same product
category for a
variety of products
Brands feature a
different mix of
benefits and appeal
to different
segments
Definition
Market Segmentation:
Dividing a market into distinct
groups with distinct needs,
characteristics,
or behavior who
might require
separate products
or marketing
mixes.
8- 5
Figure 8-1:
Steps in Market
Segmentation, Targeting,
and Positioning
8- 6
Market Segmentation
Key Topics
Segmenting
Consumer Markets
Segmenting
Business Markets
Segmenting
International
Markets
Requirements for
Effective
Segmentation
Geographical
segmentation
Marketing mixes are
customized
geographically
Demographic
segmentation
Psychographic
segmentation
Behavioral segmentation
Using multiple
segmentation variables
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Market Segmentation
Geographic
Segmentation Variables
World Region
or Country
U.S. Region
State
City
City or
Metro Size
Neighborhood
Density
Climate
8- 8
Discussion Question
Geographical climate is
a legitimate means of
segmentation for many
products or services.
Name several examples of
products for which need
(and demand) would vary
on a geographical basis.
8- 9
Market Segmentation
Key Topics
Segmenting
Consumer Markets
Segmenting
Business Markets
Segmenting
International
Markets
Requirements for
Effective
Segmentation
Geographical segments
Demographic
segmentation
Most popular type
Demographics are closely
related to needs, wants
and usage rates
Psychographic
segmentation
Behavioral segmentation
Using multiple
segmentation variables
8- 10
Market Segmentation
Demographic
Segmentation Variables
Age
Gender
Family size
Family life cycle
Income
Race
Occupation
Education
Religion
Generation
Nationality
8- 11
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Market Segmentation
Key Topics
Segmenting
Consumer Markets
Segmenting
Business Markets
Segmenting
International
Markets
Requirements for
Effective
Segmentation
Geographic segments
Demographic
segmentation
Psychographic
segmentation
Lifestyle, social class,
and personality-based
segmentation
Behavioral
segmentation
Using multiple
segmentation variables
8- 13
Swatch targets
those with an
active lifestyle
8- 14
Market Segmentation
Key Topics
Segmenting
Consumer Markets
Segmenting
Business Markets
Segmenting
International
Markets
Requirements for
Effective
Segmentation
Geographic segments
Demographic
segmentation
Psychographic
segmentation
Behavioral
segmentation
Typically done first
Using multiple
segmentation
variables
8- 15
Market Segmentation
Behavioral
Segmentation Variables
Occasions
Benefits
User Status
User Rates
Loyalty Status
Readiness Stage
Attitude Toward
the Product
8- 16
8- 17
Checkout Direct
offers retailers &
manufacturers an
excellent method
of reaching
segments of
heavy users, as
well as users of
the direct
competition.
8- 18
Market Segmentation
Key Topics
Segmenting
Consumer Markets
Segmenting
Business Markets
Segmenting
International
Markets
Requirements for
Effective
Segmentation
Geographic segments
Demographic
segmentation
Psychographic
segmentation
Behavioral
segmentation
Using multiple
segmentation
variables
Prizm
8- 19
Discussion Question
Visit PRIZMs You are
where you live
website.
Enter the zip code(s) of
your choice.
Were you
surprised by
what you
found?
8- 20
Market Segmentation
Key Topics
Segmenting
Consumer Markets
Segmenting
Business Markets
Segmenting
International
Markets
Requirements for
Effective
Segmentation
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
8- 21
Market Segmentation
Key Topics
Geographic segmentation
Segmenting
Consumer Markets
Segmenting
Business Markets
Segmenting
International
Markets
Economic factors
Requirements for
Effective
Segmentation
Location or region
Population income or level of
economic development
Cultural factors
Language, religion, values,
attitudes, customs,
behavioral patterns
8- 22
Market Segmentation
Key Topics
Segmenting
Consumer Markets
Segmenting
Business Markets
Segmenting
International
Markets
Requirements for
Effective
Segmentation
Measurable
Size, purchasing power, and
profile of segment
Accessible
Can be reached and served
Substantial
Large and profitable enough
to serve
Differentiable
Respond differently
Actionable
Effective programs can be
developed
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Target Marketing
Evaluating Market Segments
Segment size and growth
Segment structural attractiveness
Level of competition
Substitute products
Power of buyers
Powerful suppliers
Figure 8-2:
Target Marketing
Strategies
8- 25
Target Marketing
Choosing a TargetMarketing Strategy
Requires Consideration of:
Company resources
The degree of product variability
Products life-cycle stage
Market variability
Competitors marketing
strategies
8- 26
Target Marketing
Socially Responsible Targeting
Some segments are at special risk:
Children
Inner-city
minority
consumers
Internet
shoppers
Positioning
Positioning:
The place the product
occupies in
consumers minds
relative to competing
products.
Typically defined by
consumers on the
basis of important
attributes.
8- 28
Positioning
Choosing a Positioning Strategy:
Identifying possible competitive
advantages -- many potential
sources of differentiation exist:
Products
Services
Channels
People
Image
8- 29
Porsche is
positioned on
the basis of
performance
and freedom.
8- 30
Positioning
Choosing a Positioning Strategy:
Choosing the right competitive
advantage
8- 31
Positioning
Criteria for Meaningful Differences
Important
Distinctive
Superior
Communicable
Preemptive
Affordable
Profitable
8- 32
Figure 8-3:
8- 33
Discussion Question
View the ad at right.
Evaluate the level of
benefits and the price.
What value proposition
is being expressed?
8- 34
Positioning
Choosing a Positioning Strategy:
Developing a positioning statement
Positioning
Positioning
Choosing a Positioning Strategy:
Communicating and delivering the
chosen position
chosen strategy
May require changes to the product,
pricing, distribution or promotion.
8- 36
BusinessNow
Zoots Video Clip
Zoots Drycleaning
has adapted its
service to meet the
needs of its target
market and reflect
its positioning.
8- 37