Segmentation, Targeting, and Positioning

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Segmentation, Targeting, and Positioning

• 10/7, 2009

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Concepts Concerning Segmentation

• Segmentation is a compromise between treating
  each customer as unique and assuming all
  customers are equal
• A market segment is a group of actual or
  potential customers who can be expected to
  respond in a similar way to a product or service
  offer
• Market segmentation is the process of dividing
  customers whose valuations of a product or
  service vary greatly into groups or segments
  containing customers whose valuations vary very
  little within the group but vary greatly among
  groups

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Desirable Criteria for Segments

• Sizable
• Identifiable
• Reachable
• Respond Differently
• Coherent
• Stable

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Methods for Market Definitionand Segmentation

• Cluster analysis
• The basic philosophy is to find a group of
  customers who, with respect to some set of
  characteristics, are similar within groups (high
  internal (within-cluster) homogeneity) but
  different among groups (high external
  (between-cluster) heterogeneity)
• Substitution among products
• The basic philosophy is to find a set of products
  that are substitutes for one another

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Bases for SegmentingConsumer Markets

• Geographic (region city size density climate)
• Demographic (age family size gender income
  occupation education religion race
  generation nationality social class)
• Psychographic (social class life style
  personality)
• AIO variables (Activities Interests Opinions)
• Behavioral (occasions benefits user status
  usage rate loyalty status readiness stage
  attitude toward product)

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VALS

• Based on attitudes toward issues such as the
  importance of work, the effectiveness of free
  enterprises, concentration of power, womens
  role, strength of religious belief, personality,
  and satisfaction
• An analysis of 800 such measures across 2,713
  consumers produced nine clusters that were
  labeled Inner-directed consumers
• Integrated Societally conscious Experientials
  I-am-me consumers
• Outer-directed consumers
• Achievers Emulators Belongers
• Need-driven consumers
• Survivors Sustainers

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Three Categories of Consumer Values and Lifestyles

• Need-driven consumers Exhibit spending driven by
  need rather than preference and are subdivided
  into survivors and sustainers, the former among
  the most disadvantaged people in the economy
• Outer-directed consumers Are the backbone of the
  marketplace and generally buy with awareness of
  what other people will attribute to their
  consumption of that product
• Inner-directed consumers They comprise a much
  smaller percentage of the population. Their
  lives are directed more toward their individual
  needs than toward values oriented to externals.
  Although their numbers are small, they may be
  important as trend setters or groups through whom
  successful ideas and products trickle down

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Jeep

• Shows how a persons lifestyle can help marketers
  understand consumer values and their impact on
  buying behavior.
• Ad targets people who want to leave the
  civilized world behind.

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PRIZM

• A geodemographic system, marketed by Claritas
  Corp.
• Potential Rating Index by Zip Market
• Begins by clustering a reduced set of 1,000
  possible demographic measures
• The basic unit of analysis is Zip Code areas
• Each Zip Code represents a row of the data
  matrix demographic attributes define the columns
• Nearly 40,000 ZIP codes are clustered into 62
  different groups

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Prizm Geodemographic Segmentation

• PRIZM develops cluster solutions, provides a
  profile of demographic attributes for each
  cluster, and relates membership in the
  geodemographic clusters to purchasing of various
  products and services
• An application of PRIZM to the beer market
• Blue Blood Estates
• Urban Gold Coast
• Gray Collars

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Bases for SegmentingBusiness Markets

• Demographic (industry company location)
• Operating Variables (technology user or nonuser
  status customer capability)
• Purchasing Approaches (purchasing-function
  organizations power structure nature of
  existing relationships general purchase
  policies purchasing criteria)
• Situational Factors (urgency specific
  application size of order)
• Personal Characteristics (innovativeness
  buyer-seller similarity attitude toward risk
  loyalty)

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Brand and Category Development
BDI
High
Low
High
Market Penetration
Maintain Point of Entry
CDI
Category Build
?
Low
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Determinant Gap Map
Crunchiness

• Peanuts

• Pretzels

High

• Fritos

• Raw vegetables

• Nachos

• Granola bar

• Potato chips

• Apple

?

• Popcorn

• Corn curls

• Beef jerky

• Soda crackers

• Cookies

• Raisins

• Pizza

• Candy bar

Nutritional Value

• Bagels

High
?

• Pie

Low

• Donut

• Cake

• Banana

• Cheese

• Ice cream

• Yogurt

?

• Soda pop

• Fruit juice

Low
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Attribute Perceptions Questionnaire
Rate each brand you are familiar with each of the
following
Disagree Agree
1. Attractive design 1...2...3...4...5 2.
Stylish 1...2...3...4...5 3. Comfortable
to wear 1...2...3...4...5 4.
Fashionable 1...2...3...4...5 5. I feel
good when I wear it 1...2...3...4...5 6. Is
ideal for swimming 1...2...3...4...5 7.
Looks like a designer label
1...2...3...4...5 8. Easy to swim in
1...2...3...4...5 9. In style
1...2...3...4...5 10. Great appearance
1...2...3...4...5 11. Comfortable to swim in
1...2...3...4...5 12. This is a designer
label 1...2...3...4...5 13. Gives me the look
I like 1...2...3...4...5 14. I like the
colors it comes in 1...2...3...4...5 15. Is
functional for swimming 1...2...3...4...5
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Multidimensional Scaling (MDS)

• The purpose of MDS is to transform consumer
  judgments of similarity or preference (e.g.,
  preference for stores or brands) into distances
  represented in multidimensional space
• The resulting perceptual maps show the relative
  positioning of all objects

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AR Perceptual Map of Swimsuit Brands
Comfort
Gap 1

• Aqualine

• Islands

• Molokai

Fashion

• Splash

• Sunflare

Gap 2
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Competition-Based Positioning Triangle
Category
Point of Parity or Examplar
Point of Parity or Examplar
Brand B
Brand A
Point of Difference
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Goal-Based Positioning Triangle
Point of Commonality
Brand Essence
Goal
Laddering
Occupation
Brand
Other Objects
Car
Entertainment
Point of Complementarity