Transcript Document
Week Five
Segmentation
Targeting and
Positioning
Ajax Persaud
Dhruv Grewal
Copyright © 2012 McGraw-Hill Ryerson Limited
Shirley Lichti
Michael Levy
Chapter Objectives
LEARNING OBJECTIVES
LO1 Describe the STP process
LO2 Describe the bases marketers use to segment
a market
LO3 Discuss the criteria for determining the
attractiveness of a segment and whether it is
worth pursuing (targeting)
LO4 Explain how a firm decides what type of
segmentation strategy to use: undifferentiated,
differentiated, concentrated, or micromarketing
LO5 Explain what positioning is and describe how
do firms do it
7-2
Chapter Roadmap
7-3
Coke Zero
“Real Men” didn’t want diet drinks
Segment of men who wanted a lower
calorie beverage
Very successful new product launch
7-4
LO1
Segmentation Targeting Positioning
Process
7-5
LO1
Step 1: Establish Overall Strategy or
Objectives
Consistent with
mission statement
Derived from mission
and current state
7-6
LO2
Step 2: Profile Segments
Segmentation Sample Segments
Base
Geographic
Country, province, city, urban, rural, climate
Continent: North America, Asia, Europe, Africa
Region: Atlantic, Central, Western Canada
Demographic
Age, gender, income, education, occupation,
ethnic background, religion, family life cycle, etc.
Psychographic
Lifestyles, Values, Personality, Self Concept
Behavioural
Benefits sought, Usage rates, User status,
Loyalty
7-7
LO2
Geographic Segmentation
Divide market into
separate geographic
units
Countries, regions
provinces, cities,
neighbourhoods,
climate, etc.
Develop appropriate
marketing programs
7-8
Test Your Knowledge
Geographic segmentation is most useful for companies whose
products satisfy needs that vary by __________.
A)
gender
B)
region
C)
age
D)
nationality
7-9
LO2
Demographic Segmentation
Most common method
Divide market into groups
based on:
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gender
age
ethnic group
family lifecycle stage
household type
income
Other, e.g. occupation,
education, religion
Census excellent source of
segmentation data
Statistics Canada Census data
7-10
LO2
Psychographic Segmentation
How consumers
describe themselves
Self-values
Self-concept
Lifestyles
7-11
LO2
VALS Framework
VALS Website
7-12
LO2
Behavioural Segmentation
Benefits
Sought
User Status
Usage Rate
Loyalty
7-13
LO2
Using Multiple Segmentation Methods
7-14
Test Your Knowledge
Which of the following tools is widely used for geodemographic
segmentation?
A)
PRISM
B)
LSAT
C)
GNP
D)
LIMRA
7-15
LO2
Finding a Place to Live
How can geodemographic segmentation be used to
help consumers find the perfect place to live?
7-16
LO2
Case in Point: Neighborhood Scout
Challenge
Answer
Results
To help homebuyers find the
perfect neighborhood for their
needs.
Use geodemographic segmentation
to identify the neighborhoods that
most closely match their needs and
wants.
A patented neighborhood search
engine with 70,000 subscribers and
more than 1 million people who have
used the service.
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LO2
7-18
LO3
Step 3: Evaluate Segment
Attractiveness
7-19
LO3
Identifiable
Who is in their market?
Are the segments unique?
Does each segment require a unique marketing mix?
Discussion question
When would these women all be in the same segment? When would
they be in different segments?
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LO3
Reachable
Know the
product exists
Understand
what it can do
Recognize
how to buy
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LO3
Responsive
Customers must:
React positively to firm’s
offering
Move toward the firm’s
products/services
Accept the firm’s value
proposition
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LO3
Substantial and Profitable
Size matters
Too small and
segment is
insignificant, not
profitable
Growth potential
equally important
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LO3
Profitable Segments
• Segment size = 60
million (<15 yrs)
• Segmentation Adoption
Percentage = 35%
• Purchase Behavior =
$500 x 1 time purchase
• Profit margin % = 10%
• Fixed Cost = $50M
Is this segment profitable?
7-24
Test Your Knowledge
Which of the following factors would be most useful in
determining whether or not a product will be profitable?
A)
the region where the consumer lives
B)
the inflation rate
C)
the defection rate
D)
the speed of the distribution factors
7-25
LO4
Step 4: Selecting a Target Market
You are a marketing manager for
a denim company and need to
choose a target market for a
new line of jeans.
Both the consumers pictured
wear jeans.
How do you choose?
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LO4
Segmentation Strategy
7-27
Test Your Knowledge
Which of the following products is most likely to use an
undifferentiated segmentation strategy?
A)
shoes
B)
jewellery
C)
cereal
D)
flour
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LO5
Step 5: Identify and Develop
Positioning Strategy
Positioning
Methods
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Value
Product Attributes
Benefits & Symbolism
Competition
Market Leadership
7-29
Test Your Knowledge
Positioning strategies generally focus on either how the product
or service affects the consumer or how it is _______________.
A)
better than the previous year’s product line
B)
advertised on the Internet
C)
better than competitors’ products and services
D)
positioned relative to the company mission
statement
7-30
LO5
Value
Meet Grandpa Tony, now retired:
He knows the price of everything he has
ever bought.
He clips the newspaper coupons.
He goes to multiple stores to get the best
price.
He is willing to pay more for quality.
He trusts brand names.
• The relationship of price to quality
• Different consumers = different value
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LO5
Product Attributes
Meet Selia, first year student.
Reasons for her college choice:
Close to home.
Good academic reputation.
Good financial aid package.
Did we mention cute guys?
Focus on the attributes that are
most important
Vary by target market
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LO5
Benefits and Symbolism
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LO5
Competition
Position
against a
specific
competitor
Position
against an
entire product
classification
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Market Leadership
May emphasize their leadership position within
their industry.
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Positioning by Using Perceptual
Mapping
When developing a positioning strategy, firms go
through 5 important steps
Perceptual Map : Displays, in two or more
dimensions, the position of products or
brands in the consumer’s mind.
The position of each brand is denoted by a small
circle, and the numbered asterisks denote
consumers’ Ideal points (Where a particular
market segment’s ideal product would lie on
the map
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LO5
Positioning Steps
1. Determine consumers’ perceptions and
evaluations in relation to competitors’.
2. Identify competitors’ positions.
3. Determine consumer preferences.
4. Select the position.
5. Monitor the positioning strategy.
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LO5
Perceptual Maps
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LO5
Repositioning
Whirlpool: New design
Surf detergent: New message
Elizabeth Arden: New faces
YM: New audience
Gallo: New image
Aqua Velva: New packaging
Arm & Hammer: New uses
7-39