Chapter 9--Segmentation, Targeting, and Positioning

Undifferentiated

(Mass marketing) Marketing coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer

Micromarketing

(One-to-one marketing) When a firm tailors a product or service to suit an individual customer's wants or needs -Ex. Lands' End lets customers choose from a variety of options in the fabric, type of collar, sleeve, shape, and based on the customer's specific measurements

Steps for segmentation, targeting, and positioning

1: Strategy or objectives 2: Segmentation methods 3: Evaluate segment attractiveness 4: Select target market 5: Identify and develop positioning strategy

Symbols

A well-known symbol can also be used as a positioning tool. A symbol can be so strong and well known that it creatse a position for the brand that distinguishes it from its competition.

Attributes

Another common positioning strategy focuses on the product attributes that are most important to the target market. -Ex. With its all-wheel-drive Quattro, Audi has positioned itself on performance and handling.

Positioning

Arranging for a market offering to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target customers.

Loyalty Status

Can also be segmented into customer loyalty -Ex. Crazy mac users

Responsive

Consumers must: React positively to firm's offering Move towards the firm's product/service Accept the firm's value proposition

Perception Map

Displays, in two or more dimensions, the position of products or brands in the consumer's mind. To create one, you must: 1. Determine consumers' perceptions and evaluations of the product or service in relation to competitors' 2. Identify competitors' positions 3. Determine consumer preferences 4. Select the position 5. Monitor the positioning strategy.

Behavioral Buyers

Divides Buyers into groups based on their knowledge, attitudes, uses or responses to a product

Demographic Segmentation

Divides the market into groups based on demographic variables such as age, gender, family sie, family life cycle, income, occupation, education, race, generation and nationality.

Geographic Segmentation

Dividing a market into different geographical units such as nations, regions, provinces, counties, cities or neighborhoods. ex. Kraft developed Post's Fiesta Fruity Pebbles cereal for hispanically dominant areas

Segmentation

Dividing a market into distinct groups with distinct needs, characteristics or behaviors that might require separate products or marketing mixes

Benefits Sought

Dividing the Market into groups according to the different benefits that consumers seek from the product Proctor&Gamble has identified several different laundry detergent segments. Each segment seeks a unique combination of benefits, from cleaning and bleaching to economy, fabric softening, fresh smell , strength or mildness and lots of suds or only a little.

Occasional Buyers

Dividing the market into groups according to occasions when buyers get the idea to buy, usually make their purchase or use the purchased item • Ex, 75% of Hershey's kisses are used for valentines day, easter and other holiday periods

Competition

Firms can choose to position their products or services against a specific competitor or an entire product/service classification. -Ex. Although most luggage companies focus on building lightweight and functional designs, Saddleback Leather focuses on rugged durability and a classic look.

Methods for segmenting consumer markets

Geographic, Demographic, Psychographic, Benefits, Behavioral (occasion, loyalty)

Differentiated

Market-coverage strategy in which a firm decides to target several market segments and designs separate offers for each - Ex. Nike offers shoes for a dozen or more different sports

Evaluation segment attractiveness

Marketers first must determine whether the segment is worth pursuing, using several descriptive criteria: Identifiable, Substantial, Reachable, Responsive, Profitable

Profitable

Marketers must assess the profitability of each segment, both current and future. Key factors: -market growth -market competitiveness -market access

General value propositions

More for More (ex. Mercedez Benz) More for the Same (ex. Lexus) The Same for Less (zellers, bestbuy) Less for much less (costco--less selection, less customer service-rock bottom prices) More for Less (Dell)

Psychographic Segmentation

Study of groups according to their shared attitudes and behaviors, lifestyles and personalities. Ex. Marketing towards 'lifestyles'--handicapped people (lifting devices, etc.)

Reachable

The consumer must know the product or service exists, understand what it can do for him or her, and recognize how to buy it.

Value Proposition

The full positioning of a brand: the full mix of benefits on which it is positioned Overlap of customers' needs and wants with what the company is offering

Targeting

The process of evaluating each market segment's attractiveness and selecting one or more segments to enter

Substantial

Too small and it is insignificant Too big and it might need it's own store Note: Size in terms of number of people is not the only consideration; despite its small size, the market for the original Hummer was incredibly profitable, and therefore was substantial

Strategies for selecting target markets

Undifferentiated, Differentiated, Concentrated, Micromarketing

Concentrated

When an organization selects a single, primary target market and focuses all its energies on providing a product to fit that market's needs -startup ventures benefit from this

Identifiable

Who is in their market? Are the segments unique? Does each segment require a unique marketing mix?

Market positioning methods

value proposition, attributes, symbols, competition