MKT 2210 CH 6 Segmentation, Positioning, Targeting

Market Segmentation

The aggregation of consumers/buyers into groups that have common needs and respond similarly to marketing programs

What 3 important facts is segmentation, targeting, and positioning based on?

• Consumers have a range of needs that one product cannot achieve

• Companies have budget and look to spend it on consumers who will purchase their product

• Marketers must have clear consumer goals set on their target market. (terms of product needs, price expectations, purchase habits, and communication tools) must be used effectively

What are the two main market segments?

Consumer Market - Goods, services, and ideas for personal use

Business Market - Products to run a business or to be used in the process of another good or service

Market Segment

A piece of the market

What are the four forms of market segmentation?

• Market

• Segment

• Niche

• Individual

Mass Segmentation

Marketing a product with a broad appeal to the entire market without any product or marketing differentiation, (e.g. utility companies) uncommon strategy

Segment Segmentation

Marketing a range of different products and brands to specifically meet the needs of an organizations varied target markets, (e.g. Car Manufacturers, Packaging Companies) Common for large companies

Niche Segmentation

Marketing a limited product line to a narrow but profitable segment of the market that is of marginal interest to major competitors, (e.g. specialty goods) smaller companies

Individual Segmentation

One-to-one marketing that involves customer rising offers and, sometimes products to fit individual needs

Target Market

Specific groups or segments of existing and potential consumers to which marketers direct their marketing efforts

Geographic Variables

Where a target market lives using elements such as country, region, province, city size, and types of locations such as urban, suburban, or rural

Demographic Variables

Age, Gender, Family, Composition, Income, Occupation, Education, Ethnicity, and home ownership

Psychographic Variables

Consumer attitudes, values, personalities, interests, opinions, and activities

Behavioristic Variables

How and why consumers use a product, why is it purchased, it desired product benefits, how often it is purchased and used, whether consumers are brand loyal

Persona

Character descriptions of a brand’s typical customer, take target market data and simplify it, making a character with the personalities, values, attitudes, beliefs, demographics, and interaction of a typical customer with a brand.

What are the 6 Steps in market segmentation?

1. Identify consumer needs in the market

2. Cluster common variables(ideas) to create a meaningful segment

3. Estimate the size and feasibility(sales potential) of each segment

4. Identify which segment that will be targeted

5. Start marketing programs to reach segments

6. Monitor and evaluate success of the programs with objectives

Product Positioning

The impression of branded product you want to establish in consumers minds which are related to needs, and their competition (driven by image, product attribute, and price)

What are three basic factors that are used in product positioning?

• Image

• Product Attributes

• Price

Image

Products are often positioned as leaders, contenders, or revels in the market, also taking on roles like trusted, prestigious, thrifty

Product Attribute

Products with features that differentiate them from the competition are often positioned on this platform, brining their product claims to the forefront

Price

Products with brand parity and little differentiation position themselves in a price platform

Positioning Statement

Formalized statement that identifies the image or brand that product represents in the market and what sets it apart from the competition. (Statements are simple, clear, and focused)

What four elements do positioning statements identify?

1. Target Market & Need

2. Branded Product Name

3. Category in which it competes in

4. Brands unique attributes and benefits

Positioning Maps

Visual representations of how products, product groups, categories are positioned in the market, used to identify gaps in the market & identify competitive nature (can identify new opportunities)

Segmentation Analytics

General data on size & growth of markets, and consumers & lifestyle trends

Why is Market Segmentation necessary for companies?

• Consumers have a range of different needs, and a single product cannot satisfy everyone.

• Companies have limited funds that must be spent efficiently on consumers most likely to purchase.

What are the four segmentation variables?

• Geographic

• Demographic

• Psychographic

• Behavioristic

What is persona in marketing?

Detailed character descriptions of a brand's typical customer that bring data alive and illustrate a "day in the life" of a brand customer

What five criteria should marketers use when evaluating and selecting a target market in Step 4?

1. Market size

2. Expected growth

3. Competitive position

4. Compatibility with the organization's objectives and resources

5. Cost of reaching the segment

What are the three steps involved in creating and using Positioning Maps?

1. Identify important attributes for a product or brand class.

2. Discover how target customers rate competing products/brands on these attributes.

3. Discover where the company's product or brand currently stands in the minds of potential customers.