chapter
segmentation, targeting, and positioning
nine
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9-2
LEARNING OBJECTIVES
LO 9-1Outline the different methods of segmenting a market.
LO 9-2Describe how firms determine whether a segment is attractive and therefore worth pursuing.
LO 9-3Articulate the differences among targeting strategies: undifferentiated, differentiated, concentrated, or micromarketing.
LO 9-4Determine the value proposition.LO 9-5Define positioning and describe how
firms do it.
9-3
Segmentation, Targeting, Positioning Process
Step 1 • Strategy or Objectives
Step 2 • Segmentation Methods
Step 3 • Evaluate Segment Attractiveness
Step 4 • Select Target Market
Step 5 • Identify and Develop Positioning Strategy
Segmentation
Targeting
Positioning
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Step 1: Establish Overall Strategy or Objectives
Check YourselfDerived from mission
and current state
©M. Hruby.
9-5
Step 2: Segmentation Methods
Segmentation Method Sample Segments
Geographic Continent: North America, Asia, Europe, AfricaWithin U.S.: Pacific, mountain, central, south, mid-Atlantic, northeast
Demographic Age, gender, income
Psychographic Lifestyle, self-concept, self-values
Benefits Convenience, economy, prestige
Behavioral Occasion, loyalty
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Geographic Segmentation
©ImagineChina
9-7
Demographic Segmentation
Most common segmentation
strategy
U.S. Census Bureau Website
©Stockbyte/Getty Images
9-8
Psychographic Segmentation
Psychographic Self-values
Self-concept Lifestyles
©Benetton Group SPA; Photo by: Oliviero Toscani
9-9
Geodemographic Segmentation
Claritas WebsiteSource: Reprinted with permission of The Nielsen Company.
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Benefit Segmentation
©image100/PunchStock©image100/PunchStock Michael Hevesy/Photodisc/Getty Images
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Behavioral Segmentation
Occasion segmentati
on
Loyalty segmentati
on
Royalty-Free/CORBIS
check yourself
9-12
1.What are the various segmentation methods?
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Step 3: Evaluate Segment Attractiveness
SEGMENT ATTRACTIVENESS
Substantial
Reachable
ResponsiveProfitable
Identifiable
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Identifiable
• Who is in their market?• Are the segments unique?• Does each segment require a unique marketing
mix?
Liquidlibrary/Dynamic Graphics/Jupiterimages
Liquidlibrary/Dynamic Graphics/Jupiterimages
Comstock Images/JupiterImages
9-15
Substantial
• Too small and it is insignificant
• Too big and it might need it’s own store
©Je
rry A
rcie
ri/C
orb
is
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Reachable
Know the product exists
Understand what it can do
Recognize how to buy
©Digital Vision/PunchStock
9-17
Responsive
React positively to firm’s offering
Move toward the firms
products/services
Accept the firm’s value proposition
Customers must:
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Profitable
Homeowners
Businesses
Segment size 75,000 1,000
Segment adoption percentage
1% 20%
Purchase behaviorPurchase priceFrequency of
purchase
$100 12 times
$50020 times
Profit margin percentage
60% 80%
Fixed costs $400,000 $1,000,000
Segment profit $140,000 $600,000
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Step 4: Selecting a Target Market
• Conde Nast has more than 20 niche magazines focused on different aspects of life.
©M Hruby
9-20
Segmentation Strategy
Targeting Strategies
Differentiated
ConcentratedMicromarketing
orone-to-one
Undifferentiated or
mass marketing
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Step 5: Develop Positioning Strategy
Positioning Methods
• Value• Salient Attributes• Symbol• Competition Photo by Tiffany Rose/WireImage/Getty
Images
9-22
Positioning Steps
9-23
Perceptual Maps
check yourself
9-24
1.What is a perceptual map?
2.Identify the six positioning steps.