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Segmentation, Targeting, Segmentation, Targeting, and Positioning: Building and Positioning: Building the Right Relationships the Right Relationships with the Right Customers with the Right Customers Chapter 8 Chapter 8

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Segmentation, Targeting, Segmentation, Targeting, and Positioning: Building and Positioning: Building 

the Right Relationships the Right Relationships with the Right Customers with the Right Customers 

Chapter 8Chapter 8

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Objectives �� Be able to define the three steps of Be able to define the three steps of 

target marketing:  markettarget marketing:  marketsegmentation, target marketing,segmentation, target marketing,

and market positioning.and market positioning.

�� Understand the major bases for Understand the major bases for segmenting consumer andsegmenting consumer and

business markets.business markets.

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Objectives �� Know how companies identifyKnow how companies identify

attractive market segments andattractive market segments and

how they choose a targethow they choose a target

marketing strategy.marketing strategy.

��Comprehend how companiesComprehend how companiesposition their products for position their products for 

maximum competitivemaximum competitive

advantage.advantage.

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��Sells multipleSells multiplebrands within thebrands within the

same productsame product

category for acategory for a

variety of productsvariety of products�� Brands feature aBrands feature a

different mix of different mix of 

benefits and appealbenefits and appeal

to differentto different

�� Has also identifiedHas also identifieddifferent nichesdifferent nicheswithinwithin certaincertainsegmentssegments

�� ProductProductmodifications aremodifications areuseful: Tide offersuseful: Tide offersseven differentseven differentproductproduct

formulations toformulations to  

Procter & GambleProcter & Gamble

Case Study

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Definit ion

�� Market Segmentation:Market Segmentation:

Dividing a market into distinctDividing a market into distinctgroups with distinct needs,groups with distinct needs,

characteristics, or behavior whocharacteristics, or behavior who

might require separate products or might require separate products or marketing mixes.marketing mixes.

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Market S egm ent at ion

�� Segmenting Segmenting 

Consumer MarketsConsumer Markets

�� Segmenting Segmenting Business MarketsBusiness Markets

��Segmenting Segmenting International MarketsInternational Markets

�� Requirements for Requirements for EffectiveEffective

SegmentationSegmentation

�� Geographical segmentationGeographical segmentation

Marketing mixes areMarketing mixes are

customized geographicallycustomized geographically

�� Demographic segmentationDemographic segmentation Most popular segmentationMost popular segmentation

Demographics are closelyDemographics are closely

related to needs, wants andrelated to needs, wants and

usage ratesusage rates

�� Psychographic segmentationPsychographic segmentation

Lifestyle, social class, andLifestyle, social class, and

personalitypersonality--basedbased

segmentationsegmentation

�� Behavioral segmentationBehavioral segmentation

Typically done firstTypically done first

TopicsTopics

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Geographic SegmentationGeographic Segmentation

VariablesVariables

Market S egm ent at ion

�� World RegionWorld Regionor Countryor Country

�� U.S. regionU.S. region

�� StateState

�� CityCity

�� NeighborhoodNeighborhood

�� City or City or Metro SizeMetro Size

�� DensityDensity

�� ClimateClimate

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21food.com id.wikipedia.org thailandunique.com

diahasri.wordpress.com cozyrira89.wordpress.com

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Demographic Segmentation VariablesDemographic Segmentation Variables

Market S egm ent at ion

�� AgeAge

�� Gender Gender 

�� Family sizeFamily size

�� Family life cycleFamily life cycle

�� IncomeIncome

�� OccupationOccupation

�� EducationEducation

�� ReligionReligion

�� RaceRace

�� GenerationGeneration

�� NationalityNationality

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Segm ent asi Unil ever

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Segm en : P rem ium 

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Fam ily Size

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Fam ily Size

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jakarta.indonetwork.co.id mitramuslim.wordpress.com

forum.detik.com

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Bgaim ana d ng yg ini ?

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Yang ini ?

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Behavioral SegmentationBehavioral Segmentation

VariablesVariables

Market Segm ent at ion

�� OccasionsOccasions

�� BenefitsBenefits

�� User StatusUser Status

�� User RatesUser Rates

�� Loyalty StatusLoyalty Status

�� ReadinessReadiness

StageStage�� Attitude Toward the ProductAttitude Toward the Product

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alamsz.wordpress.com viocollections... forumhalal.wordpress.com

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Berdasar St at us

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cameraphonesplaza.com gueadi.info

rsportscars.com

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Market Segm ent at ion

�� Segmenting Segmenting Consumer MarketsConsumer Markets

�� Segmenting Segmenting Business MarketsBusiness Markets

��Segmenting Segmenting International MarketsInternational Markets

�� Requirements for Requirements for EffectiveEffective

SegmentationSegmentation

�� Demographic segmentationDemographic segmentation

Industry, company size,Industry, company size,

locationlocation

�� Operating variablesOperating variables

Technology, usage status,Technology, usage status,

customer capabilitiescustomer capabilities

�� Purchasing approachesPurchasing approaches

�� Situational factorsSituational factors

Urgency, specific application,Urgency, specific application,

size of order size of order 

�� Personal characteristicsPersonal characteristics

Buyer Buyer--seller similarity, attitudesseller similarity, attitudes

toward risk, loyaltytoward risk, loyalty

TopicsTopics

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Market Segm ent at ion

�� Segmenting Segmenting 

Consumer MarketsConsumer Markets

�� Segmenting Segmenting Business MarketsBusiness Markets

�� Segmenting Segmenting International MarketsInternational Markets

�� Requirements for Requirements for EffectiveEffectiveSegmentationSegmentation

�� Geographic segmentationGeographic segmentation

Location or regionLocation or region

�� Economic factorsEconomic factors

Population income or level of Population income or level of 

economic developmenteconomic development

�� Political and legal factorsPolitical and legal factors

Type / stability of government,Type / stability of government,

monetary regulations, amountmonetary regulations, amount

of bureaucracy, etc.of bureaucracy, etc.

�� Cultural factorsCultural factors

Language, religion, values,Language, religion, values,

attitudes, customs, behavioralattitudes, customs, behavioral

patternspatterns

TopicsTopics

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Market Segm ent at ion

�� Segmenting Segmenting Consumer MarketsConsumer Markets

�� Segmenting Segmenting Business MarketsBusiness Markets

��Segmenting Segmenting International MarketsInternational Markets

�� Requirements for Requirements for EffectiveEffective

SegmentationSegmentation

�� MeasurableMeasurable

Size, purchasing power, andSize, purchasing power, and

profile of segmentprofile of segment

�� AccessibleAccessible

Can be reached and servedCan be reached and served

�� SubstantialSubstantial

Large and profitable enough toLarge and profitable enough to

serveserve

�� DifferentiableDifferentiable

Respond differentlyRespond differently

�� ActionableActionable

Effective programs can beEffective programs can be

developeddeveloped

TopicsTopics

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T arget Market ing

�� Evaluating Market SegmentsEvaluating Market Segments

Segment size and growthSegment size and growth

Segment structural attractivenessSegment structural attractiveness

Level of competitionLevel of competition

Substitute productsSubstitute products

Power of buyersPower of buyers

Powerful suppliersPowerful suppliers

Company objectives and resourcesCompany objectives and resources

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T arget Market ing

�� Target Marketing StrategiesTarget Marketing Strategies

Undifferentiated (mass) marketingUndifferentiated (mass) marketing

Differentiated (segmented)Differentiated (segmented)

marketingmarketing

Concentrated (niche) marketingConcentrated (niche) marketing

Micromarketing (local or individual)Micromarketing (local or individual)

marketingmarketing

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T arget Market ing�� Choosing a TargetChoosing a Target--MarketingMarketing

Strategy Requires ConsiderationStrategy Requires Consideration

of:of:

Company resourcesCompany resources

The degree of product variabilityThe degree of product variability

Product¶s lifeProduct¶s life--cycle stagecycle stage

Market variabilityMarket variability

Competitors¶ marketing strategiesCompetitors¶ marketing strategies

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T arget Market ing

�� Socially Responsible TargetingSocially Responsible Targeting

Some segments are at special risk:Some segments are at special risk: ChildrenChildren

Inner Inner--city minority consumerscity minority consumers

Internet shoppersInternet shoppers Controversy occurs when theControversy occurs when the

methods used are questionable.methods used are questionable.

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Posit ioning

�� Positioning:Positioning:

The place the product occupies inThe place the product occupies inconsumers¶ minds relative toconsumers¶ minds relative to

competing products.competing products.

Typically defined by consumers onTypically defined by consumers onthe basis of important attributes.the basis of important attributes.

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Posit ioning�� Choosing a Positioning Strategy:Choosing a Positioning Strategy: I

dentifying possible competitiveIdentifying possible competitiveadvantagesadvantages

Products, services, channels, people or Products, services, channels, people or 

image can be sources of differentiation.image can be sources of differentiation.

Choosing the right competitive advantageChoosing the right competitive advantageH ow many differences to promote?H ow many differences to promote?

±± Unique selling propositionUnique selling proposition

±± Positioning errors to avoidPositioning errors to avoid

W hich differences to promote?W hich differences to promote?

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Criteria for Criteria for 

Meaningful DifferencesMeaningful Differences

Posit ioning

�� ImportantImportant

�� Superior Superior 

�� PreemptivePreemptive

�� DistinctiveDistinctive

�� CommunicableCommunicable

�� AffordableAffordable

�� ProfitableProfitable

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Posit ioning

�� Choosing a Positioning Strategy:Choosing a Positioning Strategy:

Selecting an overall positioning strategySelecting an overall positioning strategyMore for More Value PropositionMore for More Value Proposition

More for the Same Value PropositionMore for the Same Value Proposition

The Same for Less Value PropositionThe Same for Less Value Proposition

Less for Much Less Value PropositionLess for Much Less Value Proposition

More for Less Value PropositionMore for Less Value Proposition

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Posit ioning

�� Choosing a Positioning Strategy:Choosing a Positioning Strategy:

Developing a positioning statementDeveloping a positioning statementPositioning statements summarize thePositioning statements summarize the

company or brand positioning company or brand positioning 

EXAMP LE: ToEXAMP LE: To (target segment and (target segment and need)need) our our (brand)(brand) isis (concept)(concept) that that 

(point (point--of of--difference)difference)..

Communicating the chosen positionCommunicating the chosen position