Market Segmentation, Targeting, and Positioning for Competitive

Steps in Segmentation,
Targeting, and Positioning
1. Identify Bases
for Segmenting the Market
2. Develop Profiles
of Resulting Segments
3. Develop Measures
of Segment Attractiveness
4. Select Target
Segment(s)
5. Develop Positioning
for Each Target Segment
6. Develop Marketing
Mix for Each Target Segment
Market
Positioning
Market
Targeting
Market Segmentation

Step 1. Market Segmentation
Levels of Market Segmentation
Mass Marketing
Same product to all consumers
(no segmentation)
Segment Marketing
Different products to one or more segments
(some segmentation)
Micromarketing
Products to suit the tastes of individuals and locations
(complete segmentation)
Niche Marketing
Different products to subgroups within segments
(more segmentation)
Local Marketing
Tailoring brands/ promotions to local customer groups
Individual Marketing
Tailoring products/ programs to individual customers

Step 1. Market Segmentation
Bases for Segmenting Consumer Markets
Geographic
Demographic
Age, gender, family size and life cycle, or income
Psychographic
Social class, lifestyle, or personality
Behavioral
Occasions, benefits sought, user status, usage rate, loyalty
Nations, states,
regions or cities

Step 1. Market Segmentation
Bases for Segmenting Business Markets
Bases
for Segmenting
Business
Markets
Demographics
Personal
Characteristics
Situational
Factors
Operating
Characteristics
Purchasing
Approaches

Step 1. Market Segmentation
Bases for Segmenting International Markets
Political/
Legal
Cultural
Intermarket
Economic
Geographic
Industrial Markets

Step 1. Market Segmentation
Requirements for Effective Segmentation
Size, purchasing power, profiles
of segments can be measured.
Segments can be effectively
reached and served.
Segments are large or profitable enough to serve.
Measurable
Accessible
Substantial
Differential
Actionable
Segments must respond differently to different marketing mix elements & programs.
Effective programs can be designed to attract and serve the segments.

Step 2. Market Targeting
Evaluating Market Segments
Segment Size and Growth
Analyze sales, growth rates and expected profitability for various segments.
Segment Structural Attractiveness
Consider effects of: Competitors, Availability of Substitute Products and, the Power of Buyers & Suppliers.
Company Objectives and Resources
Company skills & resources relative to the segment(s).
Look for Competitive Advantages.

Step 2. Market Targeting
Market Coverage Strategies
Segment 1
Segment 2
Segment 3
Segment 1
Segment 2
Segment 3
Company
Marketing
Mix
Company
Marketing
Mix
Company
Marketing Mix 1
Company
Marketing Mix 2
Company
Marketing Mix 3
Market
A. Undifferentiated Marketing
B. Differentiated Marketing
C. Concentrated Marketing

Step 2. Market Targeting
Choosing a Market-Coverage Strategy
Company
Resources
Product
Variability
Product’s Life-Cycle
Stage
Market
Variability
Competitors’
Marketing Strategies

Step 3. Positioning for Competitive
Advantage
Product’s Position - the way the product is defined by consumers on important attributes - the place the product occupies in consumers’ minds relative to competing products.
Marketers must:
Plan positions to give their products the greatest advantage in selected target markets,
Design marketing mixes to create these planned positions.

Step 3. Positioning for Competitive
Advantage: Strategies
Against a
Competitor
Usage
Occasions
Away from
Competitors
Product
Attributes
Product
Class
Benefits
Offered
User Class

Steps to Choosing and Implementing
a Positioning Strategy
Step 1. Identifying Possible Competitive Advantages: Competitive Differentiation.
Step 2. Selecting the Right Competitive Advantage: Unique Selling Proposition (USP).
Step 3. Communicating and Delivering the Chosen Position.

Developing Competitive
Differentiation
Product
Service
Image
People
Areas for Competitive
Differentiation

Selecting the Right Competitive
Advantages
Criteria
for
Determining
Which
Differences
to
Promote
Affordable
Superior
Profitable
Preemptive
Distinctive
Important
Communicable