Ch. 6 - Segmentation, Targeting and Positioning

Two Main Market Segments

 Consumer market: Consists of goods, services, and ideas that a person can purchase or support for their own personal use.

Business market: Products that are purchased either to run a business or to be used as a component in another good or service. 

Market Segmentation

Involves aggregating prospective buyers into groups that have common needs and respond similarly to marketing programs.

These groups are relatively homogeneous and consist of people who are fairly similar in terms of their consumption behaviour, attitudes, and profiles.

Product Differentiation

Positioning a product to a target group so that it appears distinct from competitive offerings.

Four Marketing Strategies

1. Mass marketing: Product appeals to a broad audience (e.g. fruits and vegetables).

2. Segment marketing: Wide range of products and services to meet the needs of an organizations varied target markets (e.g. one car brands different kinds of cars).

3. Niche marketing: Restricted efforts to marketing a limited product line (e.g. eco friendly laundry detergent).

4. Individualized marketing: Customization of products to fit individual needs (e.g. Coca Cola customized name campaign).

Target Market

The specific group or segment(s) of existing and potential consumers to which marketers direct their marketing efforts.

Target Market Profile

A description of the target market that contains specific information about the target group in four areas: geographics, demographics, psychographics, and behaviouristics.

Process of Segmenting the Market

(6 Steps)

1. Identify consumer / customer needs and common characteristics in the market.

2. Cluster common consumer / customer variables to create meaningful market segments.

3. Estimate the size and feasibility of each segment.

4. Identify the segments to be targeted.

5. Take actions with marketing programs to reach the segments.

6. Monitor and evaluate the success of these programs compared with objectives.

Positioning Statement

A formalized statement that identifies the image a branded product represents in the market and what sets it apart from the competition.

They average a short paragraph and identify four elements:

1. Target market and need,

2. Branded product name,

3. Category in which the product competes, and

4. Brand’s unique attributes and benefits (what sets the product apart from the competition and meets customer needs).

Product Positioning

(3 Elements IPP)

Refers to the impression of the branded product you want to establish in consumers’ minds relative to their needs and also in contrast to the competition. There are three basic factors that appear. This includes:

• Image: Products are often positioned as leaders, contenders, or rebels in the market, also taking on characteristics such as trusted, prestigious, or thrifty.

• Product attribute: Products with features that differentiate them from the competition are often positioned on this platform, bringing product claims to the forefront.

• Price: Products with brand parity and little product differentiation may position themselves on a price platform.

Positioning Maps

Also known as perceptual maps, are visual representations of how products or product groups are positioned within a category to consumers/customers.

• Can visually represent categories within a market or, more specifically, product and brand offerings within a category.

• Useful tools for marketers as they can reveal gaps in the market where consumers may be underserved, while also highlighting the competitive nature of the category.

Steps to Creating a Positioning Map

• Identity the important attributes for a product or brand class

• Discover how target customers rate competing products or brands with respect to these attributes.

• Discover where the company’s product or brand is on these attributes in the minds of potential customers.

Four Variables in a Target Market Profile

1. Geographics: Where do they live?

2. Demographics: Age, gender, income, occupation etc. (easiest to find).

3. Psychographics: values, personalities, general interests, opinions, social media (hardest to find).

4. Behavioristics: How and why?

Geographics

Descriptor of a target market looks at where a target market lives, using variables such as country, region, province, city size, and population density, such as urban, suburban, or rural.

Demographics

One of the easiest factors to determine is the _________ profile of a target market. This includes identifying ranges for age, gender, family composition, income, occupation, education, ethnic background, and home ownership for the main target market.

Psychographics

One of the most difficult variables to identify for marketers. It involves understanding consumers’ lives, values, personalities, general interests, opinions, media usage, technology preferences, and activities.

This information is generally based on the primary research that marketers conduct to gather insights on their consumers.

Behavioristics

Directly refers to how and why consumers buy and use products.

• It is one of the most important target market variables as it can direct the product’s positioning in the market and can drive the main marketing communication messages of the brand, as well as promotional ideas and areas for new product development.

Brand Loyalty

Refers to the favourable attitudes that a consumer has over time toward a brand that result in varying levels of purchase commitment to the brand.

Personas

Character descriptions of a brand’s typical customers.

Bring target market data alive by creating fictional character narratives, complete with images, in one-page descriptions or snapshots that capture the personalities, values, attitudes, beliefs, demographics, and expected interactions of a typical user with a brand.