Unit 4 - Market Segmentation, Targeting & Positioning (Revised - Sept 2013)

8/10/2019 Unit 4 - Market Segmentation, Targeting & Positioning (Revised - Sept 2013)

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UNIT 4

MARKET SEGMENTATION,

TARGETING & POSITIONING


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Overview: Segmentation, Targeting

& Positioning

Why do this?


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MARKET SEGMENTATION

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The process ofdividing a largemarket into smaller,

distinct groups ofbuyers with differentneeds, characteristics

or behaviours whomight requiredifferent products or

marketing mixes. 3


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Bases for Segmenting Consumer

Markets

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Occasions, Benefits,Uses, or Attitudes

Behavioral

Geographic

Region, City or MetroSize, Density, Climate

Demographic

Age, Gender, Family size

and Life Cycle, Race,Occupation, or Income ...

Social Class, Lifestyle orPersonality

Psychographic


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Figure 8.4 Segmentation for selling salty snacks in the workplaceSource: Adapted from Barron, J. and Hollingshead, J. (2002) Market segmentation work: successful marketing really does begin with effective segmentation, Marketing Management, JanuaryFebruary:

248. Reproduced with permission from J. Barron, J. Hollingshead and the Monitor Group


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Segmenting

BusinessMarkets

The nested

approach to

segmentationSource: Bonoma, T. V. and Shapiro, B. P.

(1983) Segmenting the Industrial

Market, D.C. Heath and Co., Lexington.

Reproduced with permission from

Rowman and Littlefield Publishing

Group


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Effective Segmentation Criteria

Size, purchasing power, profilesof segments can be measured.

Segments can be effectivelyreached and served.

Segments are large or profitableenough to serve.

Measurable

Accessible

Substantial/Profitable

Differential

Actionable

Segments must responddifferently to different marketingmix elements & programs.

Effective programs can bedesigned to attract and servethe segments.

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STUDENT ACTIVITY:

Which variables or descriptors might be most

appropriate for segmenting the market for the

following products? Justify your answer.

1. Breakfast cereals

2. Personal computers/ laptops

3. Lawnmowers

4. Printers

5. Soft Drinks/ Juices

6. Hotels

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MARKET TARGETING

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The process ofevaluating each marketsegments

attractiveness, andselecting one or moresegments to enter, usingcriteria such as

profitability,sustainability, level ofcompetition, market sizeetc.

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TARGETINGChoosing a Target Market

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Depends on: Company resources

Product variability

Product life-cycle stage

Market variability Competitors marketing

strategies

Segment size and growth

Segment structuralattractiveness (see Porters5-forces Model)

Organizational objectivesand resources


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Five Patterns of Target Market Selection

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Single-segment

concentration

Product

specializationM1 M2 M3

P1

P2

P3

SelectivespecializationM1 M2 M3

P1

P2

P3M1 M2 M3

P1

P2

P3

M1 M2 M3

P1

P2

P3

P1

P2

P3

M1 M2 M3

P = Product, M = Market

e.g. Apples focus

on high-endsmartphones

e.g. GM producing

different brands of

vehicles for different

countries

Marketspecialization

e.g. baby products

by Johnson &Johnson

Full marketcoverage

e.g. Unilever offers different

brands in different productcategories

e.g. Gillette focuses

on Personal careitems


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APPROACHES TO TARGETING:UNDIFFERENTIATED MARKETING

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Sometimes referred to as mass marketing the firm may

decide to aim its resources at the entire market with one

particular offer, ignoring all segment differences. One

product aimed at the mass market in the hope that asufficient amount of buyers would be attracted.

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APPROACHES TO TARGETING:DIFFERENTIATED MARKETING

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Where the firm decides to target several segments and

develops distinct products/services with separate

marketing mix strategies aimed at the varying groups.

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APPROACHES TO TARGETING:CONCENTRATED MARKETING

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Where the organization concentrates its marketingeffort on one particular segment. The firm willdevelop a product that caters for the needs of that

particular group to increase its market share in thatsegment.

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APPROACHES TO TARGETING

MICROMARKETING

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Local Marketing

Tailoring brands andpromotion to the needsand wants of localcustomer groups:

Cities

Neighborhoods

Stores

Individual Marketing

Tailoring products andmarketing programs tothe needs andpreferences of individual

customersAlso known as:

One-to-one marketing

Mass customization

Markets-of-one marketing

The practice of tailoring products and marketing programs

to suit the tastes of specific individuals and locations


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STUDENT ACTIVITY

1. Identify organizations which you believe

adopted the different approaches to

Targeting, and explain why they choosethat approach

2. Identify two (2) companies which

manufacture several products/ brandsthat compete with each other. Explain

why the company would choose to do so.

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MARKET POSITIONING

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Arranging for a

product/service

to occupy aclear, distinctive

and desirable

place in thecustomers

mind, relative to

other products.17


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POSITIONING CONCEPTS

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Functional positions Solve problems

Provide benefits to customers

Get favorable perception by investors (stock profile) and

lenders Symbolic positions Self-image enhancement

Ego identification

Belongingness and social meaningfulness Affective fulfillment

Experiential positions Provide sensory stimulation

Provide cognitive stimulation


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DIFFERENTIATION AND POSITIONING

Positioningmaps use keyvariables, asdistinguishedby the targetmarket, toshow consumerperceptions of

brands versuscompetingproducts.


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Positioning Strategies

Cult positioning - Harry Potter books. Origin- Perrier bottled at source.

Positioned with synergistic products and brands -

Bentley and Breitling (high-end Swiss watches).

Positioned against competitors Pepsi vs. Coke

Positioned away from competitors - 7-Up the number 1

Un-cola.

Product class membership - I cant believe its notbutter, the vegetable fat spread, is clearly positioned

against butter.

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Differentiation and PositioningChoosing the Right Competitive Advantage

Difference to promote should be:

Important Distinctive Superior

Communicable Preemptive Affordable

Profitable
http://www.youtube.com/watch?v=HOYnOeo42ko


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STUDENT ACTIVITY

Using and industry of your choice, create a

positioning/ perceptual map identifying where

each company or product would be located.

1. Explain why you choose those specific criteria for

positioning the products (i.e. Axis titles)

2. Select a company/ product and identify which of the

positioning strategies you would recommend. State

why.

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Differentiation and PositioningDeveloping a Positioning Statement

A positioning statement is a succinct description of the coretarget audienceto whom a brand is directed, and a compellingpicture of how the marketer wants them to view the brand.There are four elements or components of a positioning

statement: Target Audience - the attitudinal and demographic description of the core prospectto whom the brand is intended to appeal; the group of customers that most closelyrepresents the brands most fervent users.

Frame of Reference- the category in which the brand competes; the context thatgives the brand relevance to the customer.

Benefit/ Point of Difference- the most compelling and motivating benefit that thebrand can own in the hearts and minds of its target audience relativeto thecompetition.

Reason to believe- the most convincing proof that the brand delivers what itpromises


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The Positioning Statement

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Template for a Positioning Statement:

For (target audience), (brand name)is the (frame ofreference)that delivers (benefit/point of difference)because only (brand name)is reason to believe).

Criteria for Evaluating a Positioning Statement:1. Is it memorable, motivating and focused to the core prospect?

2. Does it provide a clear, distinctive and meaningful picture of the brandthat differentiates it from the competition?

3. Can the brand own it?

4. Is it credible and believable?

5. Does it enable growth?

6. Does it serve as a filter for brand decision-making?

E l f P i i i S


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Examples of Positioning Statements

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For those suffering from a cold,

Comtrex offers four different reliefformulas that treat and work

against your specificcoldailments

For consumers ages 16-35, Crest

Whitestrips whiten teeth five times

better than the leading paint-onwhitening gel. Thats because

Crests gel-coated strips hold the

peroxide on teeth longer, to whiten

stains below the tooth surface.


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Common and serious positioning

errors

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Under-positioning A positioning error referring to failure to position a

company, its product or brand.

Over-positioning

A positioning error referring to too narrow a picture ofthe company, its products or a brand beingcommunicated to target customers.

Confused positioning

Leaves consumers with a confused image of the

company, its product or brand. Implausible positioning

Making claims that stretch the perception of thebuyers too far to be believed.

Documents

Unit 4 - Market Segmentation, Targeting & Positioning (Revised - Sept 2013)