Segmentation, Targeting, and Positioning

Market Segmentation
Divide a market into smaller segments
Identifying a target market
Select the segment/s in which to operate
Differentiation
Create something perceived as unique by your customers
Positioning
Decide how to operate in a specific segment, and how to be perceived by customers
Market
People or organizations with needs or wants and the ability and willingness to buy
Market Segment
A subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs and purchasing behavior
Market Segmentation
The process of dividing a market into meaningful, relatively similar, identifiable segments or groups
5 Bases of Segmentation
Geography, Demographics, Psychographics, Benefits Sought, and Usage Rate
5 Criteria for Segmentation
Difference, Substantiality, Identifiability and Measurability, Accessibility, and Responsiveness
Geographic Segmentation
Region of the country, Market Size, Market Density, and Climate
Demographic Segmentation
Age, Gender, Income, Ethnic, and Family Life Cycle
Income Segmentation
Determines consumer wants, Determines Buying Power, and Retailers can Appeal to
Psychographic Segmentation
Personality, Motives, Lifestyles, and Geodemographics
Personality
Reflects a person’s traits, attitudes, and habits
Motives
Marketers might appeal to emotional, rational, or status motives, among others
Geodemographic Segmentation
-Segmenting potential customers into neighborhood lifestyle categories
-Combines geographic, demographic, and lifestyle segmentation
Benefit Segmentation
The process of grouping customers into market segments according to the benefits they seek from the product
More
The _____ variables you use, the more accurate your customers’ profile will be however the more clumsy and hard to manage your segments will be
Target Market
A group of people or organizations for which and organization designs, implements, and maintains a marketing mix intended to meet the needs of that group, resulting in mutually satisfying exchanges
Undifferentiated Targeting Strategy
A marketing approach that views the market as one big market with no individual segments and thus uses a single marketing mix
Advantages of Undifferentiated Targeting Strategy
Potential savings on production and marketing costs
Disadvantages of Undifferentiated Targeting Strategy
Unimaginative product offerings and company more susceptible to competition
Concentrated Targeting Strategy
A strategy used to select one segment of a market for targeting marketing efforts
Advantages of Concentrated Targeting Strategy
Concentration of resources, meets narrowly defined segment
Disadvantages of Concentrated Targeting Strategy
Segments too small, or changing and large competitors may market to niche segment
Multisegment Targeting Strategy
A strategy that chooses two or more well-defined market segments and develops a distinct marketing mix for each
Advantages of Multisegment Targeting Strategy
Greater financial success and economies of scale
Disadvantages of Multisegment Targeting Strategy
Higher costs and cannibalization
Costs of Multisegment Targeting Strategy
Product design costs, production costs, promotion costs, inventory costs, marketing research costs, management costs, and cannibalization
One-to-One Marketing is
Individualized, Information-Intensive, Long-Term, Personalized
One-to-One Marketing has a goal of
Cost reduction, customer retention, increased revenue, and customer loyalty
STP
Segmentation, targeting, and positioning
Positioning
Developing a specific marketing mix to influence potential customers’ overall perception or a brand, product line, or organization in general
Effective Positioning
-Assess the positions occupied by competing products
-Determine the dimensions underlying these positions
-Choose a market position where marketing efforts will have the greatest impact
Product Differentiation
A positioning strategy that some firms use to distinguish their products from those of competitors, and that is something valuable for the customers
Perceptual Mapping
A means of displaying or graphing, in two or more dimensions, the location of products, brands, or groups of products in customers’ minds
Positioning Bases
Attribute, price and quality, use or application, product user, product class, competitor, and emotion
Repositioning
Changing consumers’ perceptions of a in relation to competing brands