Transcript Chapter 6: Developing Product and Brand Strategy

Chapter 4: Planning
Segmentation, Targeting, and
Positioning
The Marketing Plan Handbook
Fourth Edition
Marian Burk Wood
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Fragmentation and Intense
Competition
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Customers exhibiting a wider variety of:
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Needs
Attitudes
Behaviors
Companies must differentiate themselves
more distinctly in the markets where they
compete.
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The Need for Segmentation,
Targeting, and Positioning
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A move away from mass marketing.
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A move towards segment marketing.
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Allows marketers to focus their resources on
the most promising opportunities.
Improves marketing efficiency and
effectiveness.
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Market Segmentation
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Definition: the process of grouping
customers within a market according to
similar needs, habits or attitudes that can be
addressed through marketing.
Even within a large segment, marketers
often can identify niches.
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Steps in the Segmentation
Process
1. Select the general market: Eliminate
markets that have no need for the product
or are inappropriate for other reasons.
2. Apply segmentation variables.
3. Assess and select segments for targeting.
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Consumer Segmentation
Variables
Type of Variable
Examples
Behavioral and
Attitudinal
Benefits sought, rate of usage, attitude
toward product and usage, price sensitivity.
Demographic
Age, gender, family status, household size,
income, occupation, education.
Geographic
Location, distance, climate.
Psychographic
Lifestyle, activities, interests.
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Consumers: Segmenting by
Behaviors and Attitudes
In many ways, the best way to segment:
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Help marketers analyze the specific value that a
particular group expects from the offering.
Include variables like:
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Benefits required or expected.
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Usage occasion and status.
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Loyalty status.
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Technological orientation.
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Attitudes toward products or usage.
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Consumers: Segmenting by
Demographics
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Popular because they are common and
easily identified.
Often point to meaningful differences in:
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Consumer needs and wants.
Product consumption.
Media usage.
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Consumers: Segmenting by
Geography
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By certain areas or climates.
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Targeting promising new markets.
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Reluctance to sell in certain areas due to
environmental threats or unfavorable
climate.
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4-9
Consumers: Segmenting by
Psychographics
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Lifestyles, activities, interests and attitudes.
Provides a deeper understanding of what and
why consumers buy.
When consumer activities or interests cross
demographic and/or geographic lines.
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Business Segmentation
Variables
Type of
Variable
Examples
Behavioral and
Attitudinal
Purchasing patterns and process, user
status, benefits expected, order
size/frequency, buyer/influencer/user
attitudes.
Demographic
Industry, business size, business age,
ownership structure.
Geographic
Location, distance, climate.
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Businesses: Segmenting by
Behaviors and Attitudes
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Purchasing patterns.
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User status.
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Attitude toward technology.
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Loyalty status.
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Price sensitivity.
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Order size/frequency.
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Attitudes.
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Benefits expected.
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Businesses: Segmenting by
Demographics
Common business demographic variables
used:
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Industry
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Business size
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Business age

Ownership structure
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Businesses: Segmenting by
Geography
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Utilizes such variables as nation, region,
state, city, and climate.
Allows for the grouping of potential
customers according to:
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Concentration of outlets.
Location of headquarters.
Geography-related needs or responses.
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Assessing Potential Target
Markets
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Target Market: The segment of the overall
market that a company chooses to pursue.
Each potential segment must be evaluated
based upon fit with the firm’s:
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Resources.
Core competencies.
Goals and objectives.
Offerings.
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Assessing Segment Attractiveness
Fit with company resources and competencies
Market Factors
Competitive Factors
Economic and
Technological Factors
Business Environment
Factors
Identify most promising segments and order of entry.
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Coverage Strategies
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Concentrated Marketing
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Undifferentiated Marketing
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Differentiated Marketing
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Personas
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Detailed but fictitious profiles representing how
individual customers in their targeted segments
behave, live, and buy.
Give marketers a deeper understanding of what
shapes each segment’s needs, preferences, buying
behavior and consumption patterns.
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Positioning
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Differentiation on the basis of attributes that
customers find meaningful.
Conveys the value that the brand provides and sets
the brand apart.
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Sets the tone for the marketing plan.
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Should be re-evaluated periodically.
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Meaningful Differentiation
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Some sources of meaningful
differentiation:
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Product features
Service attributes
Channel attributes
Pricing attributes
Other attributes
Consideration is also given to positions
being staked out by the competition.
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Publishing as Prentice Hall
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