Kotler07 11e segmentation, targeting, and positioning

Segmentation, Segmentation, Targeting, and Targeting, and

PositioningPositioning

Chapter Chapter 77

7- 2

Definition

Market Segmentation:Market Segmentation: Dividing a market into distinct Dividing a market into distinct

groups with distinct needs, groups with distinct needs, characteristics, or behavior who characteristics, or behavior who might require separate products might require separate products or marketing mixes.or marketing mixes.

7- 3

Steps in Market Segmentation, Targeting,

and Positioning

7- 4

Market Segmentation

Segmenting Segmenting Consumer MarketsConsumer MarketsSegmenting Segmenting Business MarketsBusiness MarketsSegmenting Segmenting International International MarketsMarketsRequirements for Requirements for Effective Effective SegmentationSegmentation

Geographical Geographical segmentationsegmentation Marketing mixes are Marketing mixes are

customized customized geographicallygeographically

Demographic Demographic segmentationsegmentationPsychographic Psychographic segmentationsegmentationBehavioral Behavioral segmentationsegmentationUsing multiple Using multiple segmentation variablessegmentation variables

Key TopicsKey Topics

7- 5

Market Segmentation

Geographic Geographic Segmentation VariablesSegmentation Variables

City or City or Metro SizeMetro Size

NeighborhoodNeighborhood

DensityDensity

ClimateClimate

World Region or World Region or CountryCountry

CountryCountry Region Region

CityCity

7- 6

Market Segmentation


Geographical segmentsGeographical segmentsDemographic Demographic segmentationsegmentation Most popular typeMost popular type Demographics are closely Demographics are closely

related to needs, wants related to needs, wants and usage ratesand usage rates

Psychographic Psychographic segmentationsegmentationBehavioral Behavioral segmentationsegmentationUsing multiple Using multiple segmentation variablessegmentation variables


7- 7

Market Segmentation

Demographic Demographic Segmentation VariablesSegmentation Variables

AgeAgeGenderGenderFamily sizeFamily sizeFamily life cycleFamily life cycleIncomeIncome

OccupationOccupationEducationEducationReligionReligionNationalityNationality

Ethnicity

7- 8

Market Segmentation


Geographic segmentsGeographic segmentsDemographic Demographic segmentation segmentation Psychographic Psychographic segmentationsegmentation Lifestyle, social class, Lifestyle, social class,

and personality-based and personality-based segmentationsegmentation

Behavioral Behavioral segmentationsegmentationUsing multiple Using multiple segmentation segmentation variablesvariables


7- 9

Market Segmentation


Geographic segmentsGeographic segments

Demographic Demographic segmentation segmentation

Psychographic Psychographic segmentationsegmentation

Behavioral segmentationBehavioral segmentation Based on knowledge, Based on knowledge,

attitude, use or response to attitude, use or response to a producta product

Typically done firstTypically done first

Using multiple Using multiple segmentation variablessegmentation variables


7- 10

Behavioral Segmentation Behavioral Segmentation VariablesVariablesOccasions: Occasions: According According

to occasions buyer get to occasions buyer get the idea to buy or use the idea to buy or use the purchased item. the purchased item.

Benefits sought: Benefits sought: According to different According to different benefits consumers benefits consumers seek from the product.seek from the product.

User Status: User Status: Nonusers, ex-users, Nonusers, ex-users, potential users, first-potential users, first-time users & regular time users & regular users. users.

User Rates: Light, medium & heavy product users.

Loyalty Status: Loyalty to Loyalty Status: Loyalty to brands, stores & brands, stores & companies can be a base. companies can be a base. Consumers can be Consumers can be somewhat loyal & somewhat loyal & completely loyalcompletely loyal

7- 11

Market Segmentation


Geographic segmentsGeographic segments

Demographic Demographic segmentation segmentation

Psychographic Psychographic segmentationsegmentation

Behavioral Behavioral segmentationsegmentation

Using multiple Using multiple segmentation segmentation variablesvariables


7- 12

Market Segmentation


Demographic segmentationDemographic segmentation Industry, company size, Industry, company size,

locationlocation

Operating variablesOperating variables Technology, usage status, Technology, usage status,

customer capabilitiescustomer capabilities

Purchasing approachesPurchasing approaches

Situational factorsSituational factors Urgency, specific Urgency, specific

application, size of orderapplication, size of order

Personal characteristicsPersonal characteristics Buyer-seller similarity, Buyer-seller similarity,

attitudes toward risk, loyaltyattitudes toward risk, loyalty


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Market Segmentation


Geographic segmentationGeographic segmentation Location or regionLocation or region

Economic factorsEconomic factors Population income or level Population income or level

of economic developmentof economic development

Political and legal factorsPolitical and legal factors Type / stability of Type / stability of

government, monetary government, monetary regulations, amount of regulations, amount of bureaucracy, etc.bureaucracy, etc.

Cultural factorsCultural factors Language, religion, values, Language, religion, values,

attitudes, customs, attitudes, customs, behavioral patternsbehavioral patterns


7- 14

Market Segmentation


MeasurableMeasurable Size, purchasing power, and Size, purchasing power, and

profile of segmentprofile of segment

AccessibleAccessible Can be reached and served Can be reached and served

SubstantialSubstantial Large and profitable enough Large and profitable enough

to serveto serve

DifferentiableDifferentiable Respond differentlyRespond differently

ActionableActionable Effective programs can be Effective programs can be

developeddeveloped


7- 15

Target Marketing

Evaluating Market SegmentsEvaluating Market Segments Segment size and growthSegment size and growth Segment structural attractivenessSegment structural attractiveness

Level of competitionLevel of competition Substitute productsSubstitute products Power of buyersPower of buyers Powerful suppliersPowerful suppliers

Company objectives and resourcesCompany objectives and resources

7- 16

Target Marketing Strategies

7- 17

Target Marketing

Undifferentiated (mass) MarketingDifferentiated (segmented) MarketingConcentrated (niche) MarketingMicromarketing (local or individual marketing)

Ignoring market Ignoring market segments differences & segments differences & make one offer to whole make one offer to whole market market

Target several segments Target several segments & designs offer for each& designs offer for each

Going after a large share Going after a large share of a segmentof a segment

Tailoring to the needs & Tailoring to the needs & wants of the localswants of the locals

Tailoring to the needs & Tailoring to the needs & wants of the individualswants of the individuals


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Target Marketing

Choosing a Target Marketing Strategy Choosing a Target Marketing Strategy Requires Consideration of:Requires Consideration of: Company resourcesCompany resources The degree of product variabilityThe degree of product variability Product’s life-cycle stageProduct’s life-cycle stage Market variabilityMarket variability Competitors’ marketing Competitors’ marketing

strategiesstrategies

Socially Responsible Target MarketingSocially Responsible Target Marketing

7- 19

Positioning

Positioning:Positioning: The place the product occupies in The place the product occupies in

consumers’ minds relative to competing consumers’ minds relative to competing products.products.

Typically defined by consumers on the Typically defined by consumers on the basis of important attributes.basis of important attributes.

Implanting the brand’s unique benefits & Implanting the brand’s unique benefits & differentiation in customers minddifferentiation in customers mind

Perceptual Positioning MapsPerceptual Positioning Maps

7- 20

Positioning

Choosing a Positioning Strategy:Choosing a Positioning Strategy: Identifying possible competitive Identifying possible competitive

advantages- many potential sources of advantages- many potential sources of differentiation exist:differentiation exist: ProductsProducts Services: speed, convenience, delivery & Services: speed, convenience, delivery &

installationinstallation Channels: coverage, expertise & Channels: coverage, expertise &

performanceperformance People: hiring & trainingPeople: hiring & training Image: brand image, color & characterImage: brand image, color & character

7- 21

Positioning

Choosing a Positioning Strategy:Choosing a Positioning Strategy: Choosing the right competitive advantageChoosing the right competitive advantage

How many differences to promote?How many differences to promote?• Unique selling propositionUnique selling proposition• Positioning errors to avoidPositioning errors to avoid

Which differences to promote?Which differences to promote?

7- 22

Positioning

Criteria for Meaningful DifferencesCriteria for Meaningful Differences

ImportantImportant

SuperiorSuperior

PreemptivePreemptive

DistinctiveDistinctive

CommunicableCommunicable

AffordableAffordable

ProfitableProfitable

Positioning Selecting an overall positioning strategySelecting an overall positioning strategy

Developing a positioning statementDeveloping a positioning statement

““To (target segment & need) our (brand) is To (target segment & need) our (brand) is (concept) that (point-of-difference)” (concept) that (point-of-difference)”

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Benefits

Price

More The Same Less

More More

for More

More for The same

More for Less

The Same

The Same for Less

LessLess for Much

Less

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Positioning

Choosing a Positioning Strategy:Choosing a Positioning Strategy: Communicating and delivering the Communicating and delivering the

chosen positionchosen position Entire marketing mix must support the Entire marketing mix must support the

chosen strategy chosen strategy May require changes to the product, May require changes to the product,

pricing, distribution or promotion. pricing, distribution or promotion.

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Kotler07 11e segmentation, targeting, and positioning

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