SEGMENTATION,%20TARGETING%20AND%20POSITIONING

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SEGMENTATION, TARGETING AND POSITIONING

• Session 4
• Wednesday, April 5 2000

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SESSION OUTLINE

• Definition and usefulness of segmentation
• A priori vs. a posteriori segmentation
• Case Sally Goodman Visits Hydro-Québec
• Segmentation variables
• Targeting strategies
• Positioning strategies

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SEGMENTATION

• A segment is a homogeneous group of buyers who
  react in a similar fashion to marketing stimuli
• Adapting the marketing mix (programme) to suit
  the specific characteristics of the segment
• The targeted segment must be large enough to
  justify a segmented approach

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TYPE OF SEGMENTATION

• A priori segmentation
• use a known segmentation variable, such as
  socio-demographic, geographic,
• compare buying patterns
• A posteriori segmentation
• compare buying patterns
• identify useful segmentation variables

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Business Demographics orMacro-segmentation

• Industry
• Company size
• Location
• Operating Variables
• Technology
• Customer capabilities

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Purchasing Approaches

• Organization of purchasing function
• Power structure
• Nature of existing relationships
• General purchase policies
• Purchasing criteria

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Personal Characteristics

• Buyer-seller similarity
• Attitudes toward risk
• Loyalty

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A good segmentation pattern should ...

• Be performed on a market which is segmented
• identify measurable and quantifiable segments
• segments which can be reached, is stable over
  time, and is profitable

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A. Undifferentiated marketing
Company marketing mix
Market
B. Differentiated marketing
Company marketing mix 1
Segment 1
Company marketing mix 2
Segment 2
Company marketing mix 3
Segment 3
C. Concentrated marketing
Segment 1
Company marketing mix
Segment 2
Segment 3
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Undifferentiated or Mass Marketing

• Mass producing, mass distributing and mass
  promoting the same product in the same way to all
  consumers
• Largest potential market helps lower costs
• Difficult to access fragmented markets
• Problems in selecting from multiple ad media and
  distribution channels

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Differentiated or Segmented Marketing

• Marketing recognizes buyers differ in needs,
  perceptions and buying behaviours
• Isolate broad segments comprising a market
• Adapt offers to best match segment needs
• Gain efficiency through strategic fit
• More focus and less competition

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Concentrated orNiche Marketing

• Marketing that focuses on subgroups within large
  identifiable groups in a market
• Dividing a segment into subsegments
• Defining group with special traits
• Seeking unique combination of benefits
• Few or no significant competitors
• Improves focus of limited resources

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Micromarketing

• Tailoring products and marketing programs to suit
  the specific tastes of specific individuals or
  locations
• Local marketing
• Local tailoring of brands and promotions
• Overcomes regional differences
• Dilutes brand image and operation efficiency

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POSITIONING

• Give a distinct image to the product
• Relative to competitors
• In the minds of prospects (actual or potential
  customers)

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Positioning Competitively

• Defined by customers on important attributes
• Place in mind relative to competing products
• Simplify evaluation
• Position happens - planned or not

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Positioning Strategies

• Product attributes
• Benefits offered
• Usage occasions
• Classes of users
• Directly on competitor
• Around competitor
• Against product class

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Choosing and Implementing
Communicate and deliver chosen position
Select the right competitive advantage
Identify possible competitive advantage
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Steps in Market Segmentation, Targeting, and
Positioning
Market positioning
6. Develop marketing mix for each target segment
5. Develop positioning for each target segment
Market targeting
4. Select the target segment(s)
3. Develop measures of segment attractiveness
Market segmentation
2. Develop profiles of resulting segments
1. Identify bases for segmenting the market
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NEXT SESSION

• Friday, April 7 2000
• The Marketing Plan
• Chapter 16 and readings
• Submit Essay I