What’s Happening? Term Project Proposal due next class

Market Segmentation and Positioning

Chapter 8

Market Segmentation

Dividing the total heterogeneous market for a good or product into smaller groups which are more homogeneous.

1.Break marke

t down

2.Group into

segments

TARGET MARKET

3.Choos

etarget marke

t

Steps in Segmentation & Targeting

Not all buyers are alike Subgroups may be identified Subgroups smaller and more

homogeneous Easier to satisfy smaller groups www.fordvehicles.com

Segmentation works because,….

Effective Segmentation

To be useful, market segments must be: – Measurable: size, purchasing power, and profile– Accessible: can be reached and served/responsive– Substantial: large enough to profitably serve– Differentiable: respond differently to a marketing mix– Actionable: effective programs can be designed

Segments should be evaluated for:– Size– Growth characteristics– Structural attractiveness– Compatibility with company objectives and resources

Discussion Questions

Put yourselves into small groups and answer the following assigned questions on page 218:

Question 2 and all parts of 4

Market Segmentation Variables

Geographic: dividing a market into different geographical units, such as nations, states, regions, counties, cities, or neighbourhoods

Demographic: dividing the market into groups based on demographic variables such as age, sex, family size, family life cycle, religion, race, and nationality

Socioeconomic: identifying differences in income, education, occupation and social class

Psychographic: dividing a market into different groups based on activities, interests, lifestyle, opinions, values or personality characteristics

Behavioural: dividing a market into groups based on consumer loyalty (to brand or store), usage, benefits sought/ expected, response to a product and price

Identifying Market Differences

Best to use multiple approaches in order to identify smaller, better-defined target groups.

Start with a single base and then expand to other bases.

Four strategies for target marketing

1. Undifferentiated Marketing: When everyone is a customer. Firm decides to ignore market

segment differences and go after the whole market with one offer.

2. Concentrated Marketing: Zeroing in on a single target. A firm goes after a large share of

one market.3. Differentiated Marketing:

Different Buyers, Different Strategies. A firm decides to target several market segments and designs separate offers for each. http://www.tide.com/en_CA/index.jsp

4. Custom/Individual Marketing: Tailoring marketing offers to the needs and preferences of

individual customers

Choosing a Market Coverage Strategy

Depends on: Company resources Degree of product variability Product life cycle stage Market viability Competitors’ marketing strategies

Market Positioning

Market positioning:– Arranging for a product to

occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers.

Product position: the way the product is defined by consumers on important attributes, relative to competing products

– The “quicker-picker-upper?”

– The “uncola?”– “Great taste, less filling?”

Positioning Map

Positioning map for large luxury SUVs.

POSITIONING MAPS FOR TEA(Exhibit 8-12, PAGE 215)