Segmentation,

Targeting & Positioning

 Objectives
• Explore the need for market segmentation in today’s business
environment
• Identify the different dimensions marketers use to segment consumer
and business-to-business markets
• Show how marketers evaluate and select potential market segments
• Explain how marketers develop a targeting strategy
• Explore how a firm develops and implements a positioning strategy
• Explain how marketers might increase long-term success and profits by
practicing customer relationship management

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 Steps in the
Target Marketing Process

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 Step 1: Segmentation

• Segmentation is the process of dividing a larger

market into smaller pieces based on one or
more meaningful, shared characteristics
• Segmentation variables are used to divide the
market into smaller slices

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 Segmenting
Consumer Markets

Demographics

Psychographics Behaviour

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Demographic Dimensions
• Age
• Gender
• Family structure
• Income and social class
• Race and ethnicity
• Geography

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Age Groups
Children

Teens

Generations

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 Psychographics
• Psychographic segments markets in terms of
shared attitudes, interests, and opinions
• Segments include demographic information
such as age and income, but also includes
richer descriptions

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Segmenting by Behaviour
• Behavioural segmentation slices consumers
on the basis of how they act toward, feel about,
or use a product
– Users versus nonusers
– Heavy, moderate, light users
– Usage occasions

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 Segmenting
Business-to-Business

• Organizational demographics
– firm size
– number of facilities
– domestic or multi-national
– type of business
– production technology utilized
• SIC characteristics (see Chapter 5 of set text)

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 Step 2: Targeting

Evaluating Market Segments

Developing Segment Profiles

Choosing a Targeting Strategy

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 Evaluating
Market Segments
• A viable target segment should satisfy these
requirements:
– Are members of the segment similar to each
other but different from other segments?
– Can marketers measure the segment?
– Is the segment size large enough to be
profitable?
– Can marketing communications reach the
segment?
– Can the segment’s needs be served?
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 Choosing a
Target Marketing Strategy

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 Undifferentiated Marketing?

An undifferentiated targeting strategy is

appealing to a broad spectrum of people

Efficient due to economies of scale

Effective when most consumers have

similar needs

Example: Wal-Mart
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 Differentiated Marketing?

A differentiated targeting strategy develops one or

more products for each of several customer groups
with different product needs

Appropriate when consumers are choosing among

well known brands with distinctive images and it is
possible to identify one or more segments with
distinct needs

Example: Elseve, L’Oreal, L’ancome

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 Concentrated Marketing?

A concentrated targeting strategy entails

focusing efforts on offering one or more products
to a single segment
– Useful for smaller firms that do not
have the resources to serve all markets
– Example: Hard Candy

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 What is
Customized Marketing?

Segments are so precisely defined that products are

offered to exactly meet the needs of each individual
Example: hair stylists

Mass customisation is a related approach in which

a company modifies a basic good to meet the needs
of an individual

Example: Proctor & Gamble’s products through

sub-brands

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 3. Positioning

• Analyze the competitors’ positions in the

marketplace
• Offer a product with a competitive advantage
• Finalize the marketing mix
• Evaluate the target market’s response so
modifications to the positioning strategy can be
made (repositioning)

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 The Brand Personality

A positioning strategy attempts to create a brand

personality for a product - a distinctive image that
captures its character and benefits

How do marketers determine where their products

actually stand in the minds of consumers?

Perceptual mapping

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 Customer
Relationship Management

A CRM strategy allows a company to identify its

best customers, stay on top of their needs, and
increase their satisfaction

CRM is about communicating with customers one

on one

CRM views customers as partners

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 Steps to
One-to-One Marketing

Identify

Differentiate

Interact

Customise

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 Characteristics of CRM

Share of Customer
Lifetime Value of the Customer
Customer Equity
A Focus on High-Value Customers

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 Back to the Futurists
Predicting the Millennium

Cocooning Vigilante Consumers

Clanning & Family Values Moving Out
Fantasy Adventure Downageing
Small Indulgences Staying Alive
EGOnomics 99 Lives
Sexuality & Celibacy Icon toppling
Wildering

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 To infinity and beyond
Predicting the next century

Cloud Doctoring – Digitized Healthcare

EMO surveillance – Mood Mining through data
Chasing the Chill – search for tranquility/escape
(see www.FaithPocorn.com)

Popcorn is values driven

Lots of other futurists out there
e.g. see
https://www.richardvanhooijdonk.com/en/ (tech and Innovation)
http://www.peterhinssen.com/ (orgabdiations/strcutures)

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 Summary
• Explored the need for market segmentation in today’s business
environment
• Identified the different dimensions marketers use to segment consumer
and business-to-business markets
• Showed how marketers evaluate and select potential market segments
• Explained how marketers develop a targeting strategy
• Explored how a firm develops and implements a positioning strategy
• Explained how marketers might increase long-term success and profits
by practicing customer relationship management

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