Segmentation, Targeting, and

PositioningChapter 8

Chapter Objectives 1. Identify the steps in the target marketing process.2. Understand the need for market segmentation and the approaches available to do it.

3. Explain how marketers evaluate segments and choose a targeting strategy.

4. Understand how marketers develop and implement a positioning strategy.

5. Explain how marketers increase long-term success and profits by practicing customer relationship management.

Why is it important??

Are we candy lovers all alike?

What makes us different?

Personal preference segments

Behavioral Segments

Lifestyle segments

Cultural segments

Demographic segments

These do!!

Target Marketing Strategy

Breaking the market into smaller parts

segment 1

segment 2

segment 3

A segment: is a set of the market who share meaningful similarities.

People who like chocolate and peanut

butter.

Kids like “fun” candyAdults prefer “mature”

indulgence

People who like to eat

candy at the movies.

Cultures with different

taste preferences

People who are health conscious, or diabetic (lifestyle/psychographic)

Segmentation Variable: some characteristic that divides the total market

into homogenous (similar) groups - each group having distinct needs or

preferences.Prefer chocolate and peanut butter. (or candy with

“filling”)

Like to “play” with their food & enjoy novelty

Need less messy candy, in a sealable

container.

Like flavors that are

common in their culture

Need lower calorie or no sugar

Ingredient preference segments

Behavioral Segments

Lifestyle segments

Cultural segments

Demographic segments

Might we fit into multiple segments?

Of course. But this is why we TARGET MARKET!

Of course. But this is why we TARGET MARKET!

Target Marketing Strategy

Target market strategy:

✓ Are the people in the segment similar to each other, but different from other groups (age, gender, ethnicity, psychographics, behaviors, etc.)?

✓ Can we measure the segment: how large is it? What it is worth in $$?

✓ Is it worth using? Can it be profitable if the strategy is carried out?

✓ Can we reach the segment? Will they hear us, listen to us, respond to us? Are they willing to?

✓ Can we actually meet their needs? Do we have the right expertise?

Target marketing checklist

Targeting Strategies

Undifferentiated Differentiated Concentrated Customized

Segmenting and targeting is minimal.

Appeals to a wide variety of customers.

Easy to reach promotional

economies of scale

Develops one or more products for several customer

groups with different product needs.

Offering one or more products to a

single segment

Tailoring products and services to each customer

Target Marketing Strategy

Identify, describe differences

Evaluate and specify attractive

segmentsChoose targeting

strategyUse the marketing

mix to create competitive

advantage in consumers’ minds

Positioning

Positioning: a marketing strategy that influences how a specific market segment perceives a good/service in comparison to

competitors.

Sugar-free candy often tastes Sugar-free candy often tastes bad and leaves a bad aftertaste bad and leaves a bad aftertaste

because of sugar alcohols or because of sugar alcohols or synthetic sugar substitutessynthetic sugar substitutes

What two main evaluative criteria do you think this

segment is using to make their purchase decision??

Good Taste

No Sugar

Bad Taste

High Sugar

PerceptPerceptual ual

mapmap

Communicating the Position to the

segment

The company does not ALWAYS create

the position....

Steps in positioning

1.Analyze the competition - what are their positions/competitive advantages?

2.Offer a product/service with competitive advantage (fill an open spot on some kind of evaluative matrix)

3.Create and finalize the marketing mix - match the selected segment with the appropriate messages/distribution/product/pricing

4. Evaluate - maybe reposition

Lay of the landWhat will customers care about? Who do you compete

with in this space? Are there open positions?

Healthy

Unhealthy

Casual/QuickUpscale

CRM & Mass Customization

Firms are moving to one-one marketing, allowing customers to make their own products.

Caters to each customers unique needs and wants. Tailoring value propositions!!

Thriving via Internet technologies & social media touch-points.

STARBUCKS

Re-Cap

1.Segment your market

2.Choose a target & targeting stragety

3.Position your product/brand