LECTURE 9

SEGMENTATION, TARGETING AND POSITIONING

Market

Aggregation
Geography (World Vs Country Vs Region Vs City)
Products (Economy Vs trucks Vs Light Vs Daily)
Time (year Vs month)

Various meanings
Overall population
Potential market those who show some interest
Available market + sufficient income
Qualified market + qualifies for access
Market served + I want to serve
Market penetrated actually buys

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Market analysis

Market penetrated= N * Q * P *
N =number of buyers
Q =quantity purchased by the average customer
P =average price
= market share

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Market Segmentation

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 Market Segmentation

Segmenting Consumer Markets

Geographic Demographic
segmentation segmentation

Psychographic Behavioral
segmentation segmentation

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Segmentation variables (1)

Geography (e.g., white goods; Coca-cola; food)

Demography
Age (e.g., Lego)
Stage of the lifecycle (e.g., holidays)
Sex (e.g., Nivea)
Family size
Income (e.g., watches)
Occupation
Education
Generation
Geo-demographic

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Segmentation variables (2)

Behavioral
Occasion of usage (e.g., Twinings; Bertolli olive oil)
Advantages sought (e.g., tooth paste)
Intensity of usage (e.g., frequent flyers)
Stage of willingness to buy (e.g., cars)
Attitude toward the product
Psychographic
Social class (e.g., Everybodys Italy )
Lifestyle (e.g., Milano da bere)
Personality

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Segmentation methods

Ex-ante:
Descriptive variables identify segments
We choose among various sub-sets (segments) based on
differences in actual buying behaviour
Ex-post
Identify sub-sets based on buying behaviour
And check whether there is any difference in terms of descriptive
variables.

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Using Multiple Segmentation Bases

Multiple segmentation is used to identify smaller, better-defined target

groups

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Requirements for Effective Segmentation

To be useful, market segments must be:

Measurable
Accessible
Substantial
Differentiable
Actionable

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Target marketing

Mass Marketing
1 marketing mix market e.g. Mc Donalds
fungible

Segmented Marketing Segment 1

e.g. PGA; air
Homogeneous within the segment Segment 2
faires
Heterogeneous among segments Segment 3

Niche Marketing e.g. Ferrari;

Segment 2
consulting firms
Micromarketing
Localized (e.g., Borders for assortment)
Personalized (promotions in US grocery; national bicycle)

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Positioning

Beyond deciding which segments of the market it will target, the

company must decide what positions it wants to occupy in those
segments.
A products position is the way the product is defined by consumers on
important attributes the place the product occupies in consumers
minds relative to competing products

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Positioning strategy

A company can differentiate its market offer along the lines of:
Product
Services
Channels
People
Image

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How many differences to promote?

Companies can develop a unique selling proposition (USP)

eg, Wal-Mart
Or
Can position themselves on more than one differentiator
eg, Unilever first three-in-one bar soap

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Which differences to promote?

A difference is worth establishing to the extent that it satisfies the

following criteria:
Important
Distinctive
Superior
Communicable
Preemptive
Affordable
Profitable

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Selecting a positioning strategy

Value proposition is
the full mix of benefits
upon which a brand is
positioned

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Competitive marketing strategies

Strategies based on superior customer value

Operational excellence: superior value by price and convenience
o Eg. Wal-Mart, Ryanair
Customer Intimacy: superior value by segmentation and tailored
products or services
o Eg. Lexus, American Express
Product leadership: superior value by leading-edge products or services
o Eg. Apple

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Competitive Positions

Competitive strategies based on the roles firms play in the target market
Market leader: e.g. GM, IBM, Coca Cola, Wal-Mart
Market challenger: e.g. Ford, Pepsi
Market follower: e.g. Unilever
Market nicher: e.g. Logitech

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