Transcript Segmentation, Targeting, and Positioning

Segmentation, Targeting, and
Positioning
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MKTG 370
Segmentation
Product positioning
strategy
Bases for
segmentation
Positioning
Targeting
Repositioning
SEGMENTATION, TARGETING, AND POSITIONING
Lars Perner, Instructor
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Definition
Although not all these consumers
are completely alike, they share
relatively similar needs and wants
Marketing action: involves efforts,
resources, and decisions--product,
distribution, promotion,
and price
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Segmentation:
“Aggregating
prospective buyers
into groups that (1)
have common needs
and (2) will respond
similarly to a
marketing action.”
SEGMENTATION, TARGETING, AND POSITIONING
Lars Perner, Instructor
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Approaches to Marketing
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Southwest
Airlines
Auto
makers
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Undifferentiated Strategy (no
intended difference from
competitors; no specific consumer
group sought out)
 Concentrated Strategy
(differentiation; one consumer
segment sought)
 Differentiated Strategy (same firm
makes different versions for
different segments)
SEGMENTATION, TARGETING, AND POSITIONING
Lars Perner, Instructor
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Segments--Examples (1)
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Air Travel
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Business/Executive: Inflexible; relatively
price insensitive (Small number of people, but
travel often)
Leisure Traveler/Student: Relatively flexible;
very price sensitive (other methods of travel-e.g., bus, car, train--are feasible; travel may
not be essential) (Very large segment)
Comfort Travelers: Comfort (e.g., space,
food) important; willing to pay (Small segment)
SEGMENTATION, TARGETING, AND POSITIONING
Lars Perner, Instructor
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Examples (2): Restaurant Diners
Price Sensitivity
Low
Low
High
Convenience
Fancy Restaurants
--e.g., Ritz Carlton
High-end
delivered food
Denny’s
Local, “unbranded”
fast food restaurants
McDonald’s
High
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E.g.,
--speed
--location
SEGMENTATION, TARGETING, AND POSITIONING
Taco Bell
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Notes on Segments
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Boundaries between product categories
are blurred--”soft drinks” or “non-alcoholic
beverages?”
Any number of “dimensions” possible--but
too many variables cut segment size
Segments must
 differ meaningfully from others
 large enough to be profitable
 be serviceable (have need that can be
met cost effectively)
SEGMENTATION, TARGETING, AND POSITIONING
Lars Perner, Instructor
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Criteria in Selecting Segments
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Potential for
increased profit and
ROI
 Similarity of needs of
consumers within
 Differences of needs
of members of
different segments
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Feasibility of serving
each specific
segments
 Cost effectiveness of
identifying members
of each segment
SEGMENTATION, TARGETING, AND POSITIONING
Lars Perner, Instructor
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Bases for Segmentation: Consumer
Characteristics
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Geographic
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Regional
Area
characteristics: The
PRIZM system
Income ≠ willingness
to spend!
 Occupation
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Demographics
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Gender
Age
Ethnicity
Household size
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Marital status
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SEGMENTATION, TARGETING, AND POSITIONING
Single, never
married
Married
Divorced
Presence of children
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Bases for Segmentation: Behavior
and Buying Situations
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Benefits sought
 Behavior
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Involvement
Usage rates and
status
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Media preferences
 Preferred shopping
outlets
“80/20” rule—20%
of consumers may
account for 80% of
consumption
SEGMENTATION, TARGETING, AND POSITIONING
Lars Perner, Instructor
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Combining variables…
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Soft drink preferences—some segmentation
variables
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Preferred taste: Cola, lime, no taste, natural juice,
ice tea
Calorie/taste tradeoff: taste more important, some
importance of both, will sacrifice taste for low
calories
Usage occasion: Multi-pack for home; single
can/bottle; fountain drink
Price sensitivity/brand loyalty: Willingness to pay
more for name brand or specialty soda
SEGMENTATION, TARGETING, AND POSITIONING
Lars Perner, Instructor
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Some combined segments…
Price sensitive, non-brand loyal colataste, full-flavor segment, multi-pack
 Price insensitive, cola taste, brand loyal,
low calorie, multi-pack
 Price insensitive, natural juice, taste
sensitive, single serving
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Typical behaviors of these consumers.
Circumstances may involve occasional
variations.
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SEGMENTATION, TARGETING, AND POSITIONING
Lars Perner, Instructor
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Positioning Strategies
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“Head-on” competition
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Airlines (want to differentiate but have difficulty
pulling it off in practice)
Beef products
Differentiation
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Burger King: Grilled instead of McDonald’s fried
burgers
Halmark: “When you care to send the very best…”
Hertz (vs. “Not exactly”)
Zachy Farms (chicken)
SEGMENTATION, TARGETING, AND POSITIONING
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Targeting: Selecting Segment(s)
and Specializing
“You can’t be all things to all people”
---> choose one or more groups
 Focus narrows scope of competition,
but demands are greater
 Repositioning: Changing
established position may be difficult - e.g.,
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Sears
McDonald
Good sales;
poor everyday
values
Lunch; not dinner
Good for children
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SEGMENTATION, TARGETING, AND POSITIONING
Lars Perner, Instructor
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Some Repositioning Campaigns
Cadillac: “It’s not your father’s car.”
 Geritol: “Not too young for Geritol.”
 Orange juice: “It isn’t just for breakfast
anymore.”
 Chocolate milk for adults
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NOTE: Repositioning is difficult. It will
take a great deal of advertising support.
There is no guarantee that consumers will
cooperate!
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SEGMENTATION, TARGETING, AND POSITIONING
Lars Perner, Instructor
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Some Brands That Were Dropped
Rather Than Repositioned
ValueJet  AirTran
 Packard Bell  e-Machines
 German Communist Party  Party for
Democratic Socialism
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SEGMENTATION, TARGETING, AND POSITIONING
Lars Perner, Instructor
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Evaluating Target Segments
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Sales potential
Competitive
presence/ potential
Cost of service
Feasibility of service
Impact on segments
already served
SEGMENTATION, TARGETING, AND POSITIONING
Lars Perner, Instructor
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Euphemisms in Positioning
“Loss Prevention Associate”
 “Sales Counselor”
 “Pre-Owned” or “Previously Loved”
Vehicle
 “Gaming”
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SEGMENTATION, TARGETING, AND POSITIONING
Lars Perner, Instructor
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