Marketing Chapter 7: Market Segmentation, Targeting, & Positioning (Class Notes)

Mass Marketing
One marketing strategy (4Ps) for everyone in a market.
What’s wrong with Mass Marketing?
You really don’t know who your customers are so it’s hard to meet their needs.
Market Segmentation
Dividing the defined market (product vs. customer) according to similar needs, characteristics or behaviors.
Example in class with Barbie:
Each segment have different needs are characteristics. You develop 4p’s off of each segment. A. 3-10 years B. 11-15 years C. 30 + years
Targeting
The selected segments whose needs are satisfied by your 4P’s.
Targeting Market Strategies
Undifferentiated, Differentiated, Concentrated, Customized (Pic in phone)
Undifferentiated Marketing
One market, one strategy.
Differentiated Marketing
More than one (3 Marketing Strategies and 3 Segments)
Concentrated Marketing
Picking one of the segments to focus on. – This is the type we are doing for our marketing plan
Customized Marketing
Each customer in each segment gets own marketing plan (4P’s)
Principles for Targeting a Segment
Measurable, Substantial, Accessible, Differential
Measurable
You can gather information about your target
Substantial
Facts and figures, need numbers.
Accessible
Access the market, barriers to overcome.
Differential
Products are different and customers are different.
Actionable
You have the resources to do it.
80/20 Rule or Paretos Law
80% of your sales will come from 20% of your customers.
Majority Fallacy
A tendency to seek the 20% — ignoring:
1. The intense competition
2. Putting all your eggs in one basket
Majority Fallacy – Be cautious
Look for small niche company instead of focusing on 20% as that can cause trouble. Go after big group but if they drop the contract you will go out of business.
So Why Segment?
To expand opportunities and find niches that are under-served.
So why Target?
Needs, Relationships, Costs, Competition, and Profit.
Positioning
The use of marketing to create a mental image of product in the mind of the target market.
CEO Nolan Archibald (WSU student)
Came up with Dewalt – Took long time to select name and color.
Three Basic Positioning Strategies
1. Reinforce existing
2. Depose
3. Reposition
Publicity to create image
Advertising to maintain image