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Segmentation, Targeting, and Positioning

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7- ObjectivesBe able to define the three steps of target marketing: market segmentation, target marketing, and market positioning.Understand the major bases for segmenting consumer and business markets.Know how companies identify attractive

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Слайд 1Segmentation, Targeting, and Positioning
Chapter 7
Customer-Driven Marketing Strategy: Creating Value for

Target Customers

Segmentation, Targeting, and PositioningChapter 7Customer-Driven Marketing Strategy: Creating Value for Target Customers

Слайд 27-
Objectives
Be able to define the three steps of target

marketing: market segmentation, target marketing, and market positioning.
Understand the major

bases for segmenting consumer and business markets.
Know how companies identify attractive market segments and how they choose a target marketing strategy.
Comprehend how companies position their products for maximum competitive advantage.

7- ObjectivesBe able to define the three steps of target marketing: market segmentation, target marketing, and market

Слайд 37-
Procter and Gamble in Kazakhstan
List as many P&G products

as you can






7- Procter and Gamble  in KazakhstanList as many P&G products as you can

Слайд 47-
Procter and Gamble in Kazakhstan
Describe the typical consumer for

every product

Secret, Old spice
Ariel, Tide, Mif
Wash&Go, Head&Shoulders, Pantene
Camay, Safeguard


7- Procter and Gamble in Kazakhstan	Describe the typical consumer for every productSecret, Old spiceAriel, Tide, MifWash&Go, Head&Shoulders,

Слайд 57-
Sells multiple brands within the same product category for

a variety of products
Ariel, Tide, Mif

Brands feature a different mix

of benefits and appeal to different segments
Wash&Go, Head&Shoulders, Pantene

Has also identified different niches within certain segments

Tide offers seven different product formulations to serve different niches’ needs


c

Procter & Gamble

7- Sells multiple brands within the same product category for a variety of productsAriel, Tide, MifBrands feature

Слайд 67-
What is Market Segmentation?
Dividing a market into smaller groups

with distinct needs, characteristics, or behavior who might require separate

products or marketing mixes

Ex.
7- What is Market Segmentation?	Dividing a market into smaller groups with distinct needs, characteristics, or behavior who

Слайд 77-
Decide on value proposition









Select customers to serve









Figure 7-1:
Steps

in Market Segmentation, Targeting, and Positioning
Segmentation
Divide the total market
into

smaller segments

Targeting
Select segment(s)
to enter

Differentiation
Differentiate the market
offering to create superior
customer value

Positioning
Position the market
offering in the minds of
target customers

Create
value for
targeted
customers

7- Decide on value propositionSelect customers to serveFigure 7-1: Steps in Market  Segmentation, Targeting, and Positioning

Слайд 87-
The Process of Market Segmentation and Target Marketing
Adults Teens

Kids
Age
Kids

7- The Process of Market Segmentation and Target MarketingAdults Teens KidsAge Kids

Слайд 97-
Segmentation of Airline Passengers
Source: Peter Doyle (1998), Marketing Management

and Strategy, Prentice Hall Europe, p.67.

7- Segmentation of Airline PassengersSource: Peter Doyle (1998), Marketing Management and Strategy, Prentice Hall Europe, p.67.

Слайд 107-
Market Segmentation
Segmenting Consumer Markets
Segmenting Business Markets
Segmenting International Markets
Requirements for

Effective Segmentation

Geographical segmentation
Marketing mixes are customized geographically
Demographic segmentation
Psychographic segmentation
Behavioral segmentation
Using

multiple segmentation variables

Key Topics

7- Market SegmentationSegmenting Consumer MarketsSegmenting Business MarketsSegmenting International MarketsRequirements for Effective SegmentationGeographical segmentationMarketing mixes are  customized

Слайд 117-
Market Segmentation
Geographic Segmentation Variables
City or Metro Size
Neighborhood
Density
Climate
World Region or

Country
Country Region
State
City

7- Market SegmentationGeographic  Segmentation VariablesCity or  Metro SizeNeighborhoodDensityClimateWorld Region or CountryCountry RegionStateCity

Слайд 127-
Geographical climate is a legitimate means of segmentation for

many products or services.

Name several examples of products for which

need (and demand) would vary on a geographical basis.

Discussion Question

7- Geographical climate is a legitimate means of segmentation for many products or services.Name several examples of

Слайд 137-
Market Segmentation
Segmenting Consumer Markets
Segmenting Business Markets
Segmenting International Markets
Requirements for

Effective Segmentation

Geographical segments
Demographic segmentation
Most popular type
Demographics are closely related to

needs, wants and usage rates
Psychographic segmentation
Behavioral segmentation
Using multiple segmentation variables

Key Topics

7- Market SegmentationSegmenting Consumer MarketsSegmenting Business MarketsSegmenting International MarketsRequirements for Effective SegmentationGeographical segmentsDemographic segmentationMost popular typeDemographics are

Слайд 147-
Market Segmentation
Demographic Segmentation Variables
Age
Gender
Family size
Family life cycle
Income
Race
Occupation
Education
Religion
Generation
Nationality


7- Market SegmentationDemographic  Segmentation VariablesAgeGenderFamily sizeFamily life cycleIncomeRaceOccupationEducationReligionGenerationNationality

Слайд 157-
What type of demographic segmentation is reflected by this

7- What type of demographic segmentation  is reflected by this ad?

Слайд 167-
Household life cycle segmentation
Based on: Gilly, M. and Enis,

B. (1982), ‘Recycling the Family Life Cycle: A Proposal for

Redefinition’, in Mitchell, A. (ed.), Advances in Consumer Research, 9, Association for Consumer Research, Ann Arbor, MI, 271–6
7- Household life cycle segmentationBased on: Gilly, M. and Enis, B. (1982), ‘Recycling the Family Life Cycle:

Слайд 177-
Market Segmentation
Segmenting Consumer Markets
Segmenting Business Markets
Segmenting International Markets
Requirements for

Effective Segmentation

Geographic segments
Demographic segmentation
Psychographic segmentation
Lifestyle, social class, and personality-based

segmentation
Behavioral segmentation
Using multiple segmentation variables

Key Topics

7- Market SegmentationSegmenting Consumer MarketsSegmenting Business MarketsSegmenting International MarketsRequirements for Effective SegmentationGeographic segmentsDemographic segmentation Psychographic segmentationLifestyle, social

Слайд 187-
Swatch targets those with an active lifestyle

7- Swatch targets those with an active lifestyle

Слайд 197-
Market Segmentation
Segmenting Consumer Markets
Segmenting Business Markets
Segmenting International Markets
Requirements for

Effective Segmentation

Geographic segments
Demographic segmentation
Psychographic segmentation
Behavioral segmentation
Typically done first
Using multiple

segmentation variables

Key Topics

7- Market SegmentationSegmenting Consumer MarketsSegmenting Business MarketsSegmenting International MarketsRequirements for Effective SegmentationGeographic segmentsDemographic segmentation Psychographic segmentationBehavioral segmentationTypically

Слайд 207-
Market Segmentation
Behavioral Segmentation Variables
Occasions
Benefits
User Status
User Rates

Loyalty Status
Readiness Stage
Attitude Toward

the Product

7- Market SegmentationBehavioral  Segmentation VariablesOccasionsBenefitsUser StatusUser RatesLoyalty StatusReadiness StageAttitude Toward the Product

Слайд 217-
Benefit Segmentation: Champion Athletic Wear
“Fit and polish” look for


function and style

“Serious sports competitors”
performance and function

“Value-seeking moms’
Durability

and value
7- Benefit Segmentation:  Champion Athletic Wear“Fit and polish” look for function and style“Serious sports competitors” performance

Слайд 227-
Mobil’s Benefit Segmentation: enhanced profits
Road Warriors 16%
Premium products and

quality service
Generation F 27%
Fast fuel, Fast service, Fast food
True

Blues 16%
Branded products and reliable service
Home Bodies 21%
Convenience
Price Shoppers 20%
Low price

Mobil charged $0.02 per gallon more,
But sales increased by 20-25%

7- Mobil’s Benefit Segmentation:  enhanced profitsRoad Warriors 16%Premium products and quality service Generation F 27%Fast fuel,

Слайд 237-
Checkout Direct offers retailers & manufacturers an excellent method

of reaching segments of heavy users, as well as users

of the direct competition.
7- Checkout Direct offers retailers & manufacturers an excellent method of reaching segments of heavy users, as

Слайд 247-
Heavy and Light Users of
Common Consumer Products
HEAVY USERS
75%
71%
Soups

and
detergents
LIGHT USERS
25%
29%
79%
75%
13%
21%
25%
83%
83%
17%
5%
17%
87%
Toilet tissue
PRODUCT
Shampoo
81%
Paper towels
Cake mix
19%
Cola
95%
Beer
Dog food
Bourbon
Total consumption

is high among heavy users (PARETO RULE)
7- Heavy and Light Users of Common Consumer ProductsHEAVY USERS75%71%Soups anddetergentsLIGHT USERS25%29%79%75%13%21%25%83%83%17% 5%17%87%Toilet tissuePRODUCTShampoo81%Paper towelsCake mix19%Cola95%

Слайд 257-
Market Segmentation
Segmenting Consumer Markets
Segmenting Business Markets
Segmenting International Markets
Requirements for

Effective Segmentation

Geographic segments
Demographic segmentation
Psychographic segmentation
Behavioral segmentation
Using multiple segmentation variables
Key

Topics
7- Market SegmentationSegmenting Consumer MarketsSegmenting Business MarketsSegmenting International MarketsRequirements for Effective SegmentationGeographic segmentsDemographic segmentation Psychographic segmentationBehavioral segmentationUsing

Слайд 267-
What is the base for segmentation?
Cosmo magazine
Prada clothes


Advanced Auditing book
Kinder Surprise
Axe deodorant
No pork inside sausages
Wedding Dress
Hotel chain

customizes rooms according to the location of its hotels
A quick-dry nail polish
ABBA songs
7- What is the base for segmentation?Cosmo magazine Prada clothes Advanced Auditing bookKinder SurpriseAxe deodorantNo pork inside

Слайд 277-
Market Segmentation
Segmenting Consumer Markets
Segmenting Business Markets
Segmenting International Markets
Requirements for

Effective Segmentation

Demographic segmentation
Industry, company size, location
Operating variables
Technology, usage status, customer

capabilities
Purchasing approaches
Situational factors
Urgency, specific application, size of order
Personal characteristics
Buyer-seller similarity, attitudes toward risk, loyalty

Key Topics

7- Market SegmentationSegmenting Consumer MarketsSegmenting Business MarketsSegmenting International MarketsRequirements for Effective SegmentationDemographic segmentationIndustry, company size, locationOperating variablesTechnology,

Слайд 287-
Market Segmentation
Segmenting Consumer Markets
Segmenting Business Markets
Segmenting International Markets
Requirements for

Effective Segmentation

Geographic segmentation
Location or region
Economic factors
Population income or level of

economic development
Political and legal factors
Type / stability of government, monetary regulations, amount of bureaucracy, etc.
Cultural factors
Language, religion, values, attitudes, customs, behavioral patterns

Key Topics

7- Market SegmentationSegmenting Consumer MarketsSegmenting Business MarketsSegmenting International MarketsRequirements for Effective SegmentationGeographic segmentationLocation or regionEconomic factorsPopulation income

Слайд 297-
Market Segmentation
Segmenting Consumer Markets
Segmenting Business Markets
Segmenting International Markets
Requirements for

Effective Segmentation

Measurable
Size, purchasing power, and profile of segment
Accessible
Can be reached

and served
Substantial
Large and profitable enough to serve
Differentiable
Respond differently
Actionable
Effective programs can be developed

Key Topics

7- Market SegmentationSegmenting Consumer MarketsSegmenting Business MarketsSegmenting International MarketsRequirements for Effective SegmentationMeasurableSize, purchasing power, and profile of

Слайд 307-
Decide on value proposition









Select customers to serve









Figure 7-1:
Steps

in Market Segmentation, Targeting, and Positioning
Segmentation
Divide the total market
into

smaller segments

Targeting
Select segment(s)
to enter

Differentiation
Differentiate the market
offering to create superior
customer value

Positioning
Position the market
offering in the minds of
target customers

Create
value for
targeted
customers

7- Decide on value propositionSelect customers to serveFigure 7-1: Steps in Market  Segmentation, Targeting, and Positioning

Слайд 317-
Target Marketing
Evaluating Market Segments
Segment size and growth
Segment structural attractiveness

Level of competition
Substitute products
Power of buyers
Powerful suppliers
Company

objectives and resources
7- Target MarketingEvaluating Market SegmentsSegment size and growthSegment structural attractiveness Level of competition Substitute products Power of

Слайд 327-
Figure 7-2:
Target Marketing Strategies

7- Figure 7-2: Target Marketing Strategies

Слайд 337-
Target Marketing
Choosing a Target-Marketing Strategy Requires Consideration of:
Company resources
The

degree of product variability
Product’s life-cycle stage
Market variability
Competitors’ marketing strategies

7- Target MarketingChoosing a Target-Marketing Strategy  Requires Consideration of:Company resourcesThe degree of product variabilityProduct’s life-cycle stageMarket

Слайд 347-
Nokia Video
1      Why has segmentation been a successful marketing

strategy for Nokia?
2      Which customer characteristics and segmentation variables are

used by Nokia?
3      Identify and describe the segments Nokia markets.
4 What potential new markets could you add to the Nokia markets?
7- Nokia Video1      Why has segmentation been a successful marketing strategy for Nokia?2      Which customer characteristics and

Слайд 357-
Decide on value proposition









Select customers to serve









Figure 7-1:
Steps

in Market Segmentation, Targeting, and Positioning
Segmentation
Divide the total market
into

smaller segments

Targeting
Select segment(s)
to enter

Differentiation
Differentiate the market
offering to create superior
customer value

Positioning
Position the market
offering in the minds of
target customers

Create
value for
targeted
customers

7- Decide on value propositionSelect customers to serveFigure 7-1: Steps in Market  Segmentation, Targeting, and Positioning

Слайд 367-
Positioning: What is it?
Segmentation + Differentiation

Consumer Competitive
analysis analysis



To Whom? What?

7- Positioning: What is it?Segmentation		+	DifferentiationConsumer	 			Competitive analysis				analysisTo Whom?			What?

Слайд 377-
Positioning
Positioning:
The place the product occupies in consumers’ minds relative

to competing products.

Typically defined by consumers on the basis of

important attributes.
7- PositioningPositioning:The place the product occupies in consumers’ minds relative to competing products.Typically defined by consumers on

Слайд 387-
Price
Quality
High
Low
High
Low
Ирбис
Карагандинское
Шымкенсткое
Heineken
Балтика
Amstel
Corona

7- PriceQualityHighLowHighLowИрбисКарагандинскоеШымкенсткоеHeinekenБалтикаAmstelCorona

Слайд 397-
Differentiating and Positioning
Differentiation - act of designing a set

of meaningful differences to distinguish the company’s offering from competitors’

offerings.
Differential (competitive) advantage - an attribute of a product or a business that is not currently matched by rival companies or products and is highly desired by target market’s customers
Positioning - process of creating an image for a product in the minds of target customers relative to competing products.
7- Differentiating and PositioningDifferentiation - act of designing a set of meaningful differences to distinguish the company’s

Слайд 407-
Positioning consists of
1. Identifying possible competitive advantages

Product, Service, Personnel, Channel, Image Differentiation
2. Developing a positioning

strategy
How many differences to promote and which ones
3. Communicating and delivering the chosen position
7- Positioning consists of1.  Identifying possible competitive advantages  Product, Service, Personnel, Channel, Image Differentiation2.

Слайд 417-
Identifying Possible Competitive Advantages
Positioning begins with actually
differentiating the company’s

marketing offer
so that it will give consumers more value
than

competitors offer

by offering lower prices than competitors or

by providing more benefits to justify higher prices
7- Identifying Possible Competitive AdvantagesPositioning begins with actually differentiating the company’s marketing offerso that it will give

Слайд 427-
Differentiation Dimensions

7- Differentiation Dimensions

Слайд 437-
Product Differentiation Variables

7- Product Differentiation Variables

Слайд 447-
Porsche is positioned on the basis of performance and

freedom.

7- Porsche is positioned on the basis of performance and freedom.

Слайд 457-
Positioning
Choosing a Positioning Strategy:
Choosing the right competitive advantage
How

many differences to promote?
Unique selling proposition (USP)
Positioning errors to avoid

Which differences to promote?
7- PositioningChoosing a Positioning Strategy:Choosing the right competitive advantage How many differences to promote?Unique selling proposition (USP)Positioning

Слайд 467-
Perceptual Map
Perceptual Map - а means of displaying or

graphing in two dimensions the location of products or brands

in the minds of consumers.
Map can show that there are no brands in a particular area, there may be room for a new product.
Research can be conducted to determine what characteristics an “ideal product” would have. If there is no competitive offering in the product space the ideal product would occupy on the map, a market opportunity may exist.
Repositioning. To see how consumers perceive competing products and take actions to try to change the product offering and the image it projects to consumers.

7- Perceptual MapPerceptual Map - а means of displaying or graphing in two dimensions the location of

Слайд 477-
Consumer Perception in 1982 and GM goals for 1990
Pontiac
Oldsmobile
Cadillac
Buick
Chevrolet

Family/
Conservative
Personal/
expressive
High

price
Low price
Saturn

7- Consumer Perception in 1982  and GM goals for 1990PontiacOldsmobileCadillacBuickChevroletFamily/ConservativePersonal/expressiveHigh priceLow priceSaturn

Слайд 487-
Positioning
Criteria for Meaningful Differences
Important
Superior
Preemptive
Distinctive
Communicable
Affordable

Profitable

7- PositioningCriteria for Meaningful DifferencesImportantSuperiorPreemptiveDistinctiveCommunicableAffordableProfitable

Слайд 497-
Which Difference to Promote?

Important: The difference delivers a highly

valued benefit to a sufficient number of buyers
Distinctive: The

difference either isn’t offered by others or is offered in a more distinctive way by the company
Superior: The difference is superior to other ways of obtaining the same benefit
Communicable: The difference is communicable and visible to buyers
Pre-emptive: The difference cannot be easily copied by competitors
Affordable: The buyer can afford to pay for the difference
Profitable: The company will find it profitable to introduce the difference
7- Which Difference to Promote?Important: The difference delivers a highly valued benefit to a sufficient number of

Слайд 507-
Figure 7-4:
Possible Value Propositions
Value proposition
is the full

mix of benefits upon which a brand is positioned

7- Figure 7-4: Possible Value Propositions Value proposition is the full mix of benefits upon which a

Слайд 517-
Possible Value Propositions
Lexus
Start ups
Dell
Rolex
1 dollar store, Southwest

7- Possible Value Propositions LexusStart upsDellRolex1 dollar store, Southwest

Слайд 527-
Positioning Strategies
 Positioning by attribute: Associating a product with a

particular feature
 Positioning by benefit: Associating a product with a special

customer benefit
 Positioning by quality/price: Using price as a cue to higher quality, with higher quality being reflected in more features and/or services
 Positioning by use/application: Associating the product with a use or application
 Positioning by user: Associating a product with a user or class of user
 Positioning by product category: Associating the product with others in a similar product class
 Positioning by competitor: Identifying the product by using a competitor as a reference point
7- Positioning Strategies	Positioning by attribute: Associating a product with a particular feature	Positioning by benefit: Associating a product

Слайд 537-
Positioning by attribute: Associating a product with a particular

feature: colour, size, design

7- Positioning by attribute: Associating a product with a particular feature: colour, size, design

Слайд 547-
Positioning by benefit: Associating a product with a special

customer benefit: quality, performance

7- Positioning by benefit: Associating a product with a special customer benefit: quality, performance

Слайд 557-
Positioning by quality/price: Using price as a cue to

higher quality, with higher quality being reflected in more features

and/or services
7- Positioning by quality/price:  Using price as a cue to higher quality, with higher quality being

Слайд 567-
Positioning by use/application: Associating the product with a use

or application

7- Positioning by use/application:  Associating the product with a use or application

Слайд 577-
Positioning by user: Associating a product with a user

or class of user

7- Positioning by user:  Associating a product with a user or class of user

Слайд 587-
Positioning by product category: Associating the product with others

in a similar product class

7- Positioning by product category: Associating the product with others in a similar product class

Слайд 597-
Positioning by competitor: Identifying the product by using a

competitor as a reference point: 7UP - uncola

7- Positioning by competitor:  Identifying the product by using a competitor as a reference point: 7UP

Слайд 607-
Positioning Strategies - Examples

7- Positioning Strategies - Examples

Слайд 627-
Choosing a Positioning Strategy:
Developing a positioning statement
Positioning statement states

the product’s membership in a category and then shows its

point-of-difference from other members of the category.

To (target segment and need) our (brand) is (concept) that (point-of-difference)

“To busy, mobile professionals who need to always be in the loop, BlackBerry is a wireless connectivity solution that allows you to stay connected to data, people, and resources while on the go, easily and reliably – more so than competing technologies”


7- Choosing a Positioning Strategy:Developing a positioning statementPositioning statement states the product’s membership in a category and

Слайд 637-
Positioning
Choosing a Positioning Strategy:
Communicating and delivering the chosen position

Entire marketing mix must support the chosen strategy
May

require changes to the product, pricing, distribution or promotion.

7- PositioningChoosing a Positioning Strategy:Communicating and delivering the chosen position Entire marketing mix must support the

Слайд 647-
Communicating & Delivering Chosen Position
If a company builds

a position on
offering superior value (Ex. better quality and

service)
to the target markets
it must then DELIVER that position
produce high-quality products
charge a higher price
distribute through high-class dealers
advertise in high-quality media
hire and train more service people
find retailers who have good reputation for service
develop sales and advertising messages that broadcast its superior service
7- Communicating & Delivering Chosen PositionIf a company builds a position on offering superior value (Ex. better

Слайд 657-
Decide on value proposition









Select customers to serve









Figure 7-1:
Steps

in Market Segmentation, Targeting, and Positioning
Segmentation
Divide the total market
into

smaller segments

Targeting
Select segment(s)
to enter

Differentiation
Differentiate the market
offering to create superior
customer value

Positioning
Position the market
offering in the minds of
target customers

Create
value for
targeted
customers

7- Decide on value propositionSelect customers to serveFigure 7-1: Steps in Market  Segmentation, Targeting, and Positioning

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