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Market Segmentationand Product Positioning

Copyright 2005 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Chapter 15

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Market segmentation: the process of dividing a

market into groups of similar consumers and

selecting the most appropriate group(s) of individuals

for the firm to serve

Introduction

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Market segmentation process

Analyze consumer-product relationships

Investigate segmentation bases

Develop product positioning Select segmentation strategy

Design marketing mix strategy

Introduction cont.

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Analyze Consumer-ProductRelationships

Analysis of affect and cognition, behavior, and

environments involved in the purchase/consumption

process for the particular product

Brainstorm the product concept Focus groups and other types of primary research

Secondary research

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Investigate Segmentation Bases

Segmentation bases

Geographic

Demographic

Sociocultural

Affective and

cognitive

Behavioral Combined approach

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Investigate Segmentation Bases, cont.

Benefits segmentation (dog food)

Segment Pampered

pet

Family

member

Dogs live

outside

Show dogs

Benefit

sought

Something

extra

special for

our baby

Dog as part

of family

experience

Something

cheap,

keep the

dog fed

well

Enhance

dogs

appearance

Product Expensive

canned

foods,

treats

Table

scraps

Dry kibble,

big bag

from

Costco

Veterinarian-

recommended

foods and

supplements

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Investigate Segmentation Bases cont.

Psychographic

segmentation

Divides markets on

differences in consumerlifestyles

AIO questions

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Self-ExpressionAchievementIdeals

BELIEVERS STRIVERS MAKERS

VALSTM

ACHIEVERS EXPERIENCERSTHINKERS

SURVIVORS

INNOVATORS

Primary Motivation

High Resources

High Innovation

Low Resources

Low Innovation

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VALS Consumer Segment:

Innovators

Resources: highest

Motivation: combination of allthree

Leading edge of change

Image as expression of taste,

independence, character

Finer things in life

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Thinkers

Resources: high

Motivation: ideals Mature, responsible

Well-educated professionals

Well-informed

Rational decision makers

Open to new ideas and social

change

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Believers

Resources: low

Motivation: ideals Conservative, predictable

Favor American products

Modest incomes

Lives centered on family,

church, community, nation

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VALS Consumer Segment:Achievers

Resources: high

Motivation: achievement

Successful, work-oriented

Satisfaction from homes andfamilies

Conservative, respect statusquo

Favor established productsthat show off their success

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Strivers

Resources: low

Motivation: achievement Values similar to Achievers

Style is importanttrying to

emulate Achievers

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Experiencers

Resources: high

Motivation: self-expression Youngest segment

High energyphysical and

social activities

Spend heavily on clothing, fast

food, and music

Like new products and

services

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Makers

Resources: low

Motivation: self-expression Practical, self-sufficient

Focus on familiar: family, work,

physical recreation

Little interest in broader world

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Survivors

Resources: lowest

Motivation: doesnt fit with anyof the three, resources too low

Oldest segment

Tend to be brand loyal

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Person/Situation segmentation

Based on the usage situation in conjunction with

individual differences of consumers

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Users

Situation

Young Married

w/o Children

Young Married

w/ Children

Middle-agedMarried w/o

Children

Eat at home

7 Taste good 1 Kids simple

tastes,inexpensive

4 Low fat

Eat out

5 Taste good,

trendy

atmosphere

2 Convenient,

place to sit,

inexpensive

6 Convenient,

have low fat

Parties

8 Impress

guests--

premium

3 Larger

quantities,

basic flavors.

9 Impress

guests, low-fat

sorbet

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Geodemographic segmentation

Analyzing specific neighborhoods

PRIZM system

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Develop Product Positioning

Positioning the product relative to competing

products in the minds of consumers

By attribute

By use or application By product user

By product class

By competitors

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Develop Product Positioning cont.

Positioning maps

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Develop Product Positioning cont.

Positioning mapsSimple Preparation

Involved Preparation

Healthy Unhealthy

Beef

Pork

Tuna

Chicken

Turkey

Fresh Fish

Bacon

Hot Dogs

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Select Segmentation Strategy

Four basic segmentation strategy alternatives

Not enter the market

Not segment but be a mass marketer

Market to only one segment Market to more than one segment and design a

separate marketing strategy for each

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Select Segmentation Strategy cont.

Criteria for segmentation strategy decisions

Measurable

Meaningful

Marketable

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Design Marketing Mix Strategy

Selecting the target market and designing themarketing mix go hand-in-hand

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Summary

Market segment defined

Market segmentation process

Market segmentation is a cornerstone of sound

marketing strategy development

Documents

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