MGCR 352: Chapter 6 Segmentation, Targeting, Positioning

Market segmentation

• separate prospective buyers into groups:

  • common needs

  • respond similarly to marketing

What does market segmentation mean

• segmentation mean finding homogenous groupings

• marketers have responded w different products for each grouping

what does segmentation mean

• linking market needs to organizations marketing program

Differentiation

• company positions its product or service as distinct from competitors

census metropolitan areas

geographic labour market areas having a population of 100k persons or more

What are the main product strategies used to segment markets?

1. One product for all segments – Same product, different marketing.

2. Multiple products for multiple segments – Tailored products for each group.

3. Segments of one (mass customization) – Personalized products at scale.

4. Unmet needs segmentation – New products for underserved groups.

Segmentation/Targeting Position Process

1) Strategy/Objectives

2) Segmentation bases

3) Evaluate segment attractiveness

4) select target market

5) identify and develop positioning strategy

Step 1: Establish overall strategy or objectives for segmentation

• be consistent with mission statement

• objectives are derived from mission/current state of capabilities

Step 2: Segmentation bases

• Geographic

• demographic

• Psychographic

• Behavioural

Geographic segmentation

• divide market into separate geographic units

• countries, regions, provinces, cities, neighbourhoods, climate

• develop appropriate marketing program for each

Demographic segmentation

• most common methods

• divide market into groups based on (gender, age, ethnicity groups, etc)

• census is a excellent source of segmentation data

Psychographic segmentation

how consumers describe and view themselves

• self values

• self concept

• lifestyles

Behavioural Segmentation

• benefits

• usage rate

• loyalty

• occasion

Values, Attitude and Lifestyle

1) Values

2) Attitudes

3) Life style

qualitative methodology used to understand how consumers think and behave differently

Val categories

• innovators

• thinkers

• believers

• achievers

• strivers

• experiencers

• makers

• survivors

what makes segment attractive

a) Identifiable

b)Reachable

c)Sustainable/Profitable

d)Responsive

a) Identifiable

firms must determine who is within market to design products/services to meet target markets

segments must be identifiable

b) Reachable

• know products exists

• understand what it can do

• recognize how to buy

c) Customer Response

• customers will:

  • react positively to firm’s offering

  • accept

  • move towards buying

d) substantial/profitable

• sizes matters

• too small, segment is insignificant n will not be profitable

• growth potential is equally important

Step 4: Select Target Market

• base on swot analysis

• assess attractiveness of opportunity

• consider organization’s competencies

Types of Targeting Strategies

• undifferentiated

• differentiated

• concentrated

• micromarketing

undifferentiated

• mass marketing

• provide same benefits for all

• same strategy for all groups

Differentiated

targeting strategy

• targets several market segments w different offerings for each

concentrated

fine targeting strategy

• selects a single, primary target market

• focuses on providing a product to fit specific market’s needs

micromarketing

one to one approach

• form of segmentation that tailors product/service to suit an individual customers needs/

Step 5: Identify and develop positioning strategy

• position your offerings in hearts/minds of customers by:

  • value

  • product attributes

  • benefits/symbolism

  • competition

  • market leadership

  • loyalty

product attributes

focus on attributes that are most important and varies by target markets

what are the two types of positioning against competition?

two basic options:

• Position against a specific competitor’s product/services

• position against an entire product classification

Positioning by Using Perceptual Mapping

1) determine consumers’ perceptions and evaluations in relation to competitors

2) identify the markets ideal points/size

3) identify competitors positions

4) determine consumer preferences

5) select the position

6) monitor the positioning strategy

Repositioning

refers to strategy in which marketers change a brand focus to target new markets

realign the brand’s core emphasis with changing market preferences