CHAPTER SEVEN: Customer-Driven
Marketing Strategy:
Segmentation, Targeting & Positioning
Topic Outline
7.1 Customer-Driven Marketing Strategy
7.2 Market Segmentation
7.3 Market Targeting
7.4 Differentiation and Positioning
Segmentation and Targeting
Market segmentation is the process that companies use to
divide large heterogeneous markets into small markets that can
be reached more efficiently and effectively with products and
services that match their unique needs.
Market targeting (targeting) is the process of evaluating
each market segment’s attractiveness and selecting one or more
segments to enter.
Market Differentiation and Positioning
Differentiation involves actually differentiating the market
offering to create superior customer value.
Positioning consists of arranging for a market offering to
occupy a clear, distinctive, and desirable place relative to
competing products in the minds of target consumers.
I. Market Segmentation
Segmenting Consumer Markets
Geographic Demographic
segmentation segmentation
Psychographic Behavioral
segmentation segmentation
1. Geographic segmentation divides the market
into different geographical units such as nations,
regions, cities, or even neighborhoods.
2. Demographic segmentation divides the market
into groups based on variables such as age, gender,
family size, family life cycle, income, occupation,
education, religion, race, generation, and nationality
2.a) Age segmentation is the process of offering
different products or using different marketing
approaches for different age groups.
2.b) Gender segmentation divides the market based
on gender(male or female).
2.c) Income segmentation divides the market into
affluent or low-income consumers.
3. Psychographic segmentation divides buyers into
different groups based on social class, lifestyle, or
personality characteristics.
4. Behavioral segmentation divides buyers into groups
based on their knowledge, attitudes, uses, or responses
to a product.
4.a) Occasions
4.b) Benefits sought
4.c) Usage rate
4.d) User status
4.e) Loyalty status
Is it better to use one segmentation basis or more ???
Multiple segmentation is used to identify smaller,
better-defined target groups.
Requirements for Effective Segmentation
To be useful, market segments must be:
Measurable
Accessible
Substantial
Differentiable
Actionable
II. Market Targeting
Target Market: consists of a set of buyers who share
common needs or characteristics that the company
decides to serve.
1. Undifferentiated marketing targets the whole
market with one offer.
(1 product for the whole population)
2. Differentiated marketing targets several different
market segments and designs separate offers for each.
(different products to different segments)
3. Concentrated marketing targets a large share of
one or a few smaller segments or niches.
( 1 product for 1 segment)
4. Micromarketing is the practice of tailoring products
and marketing programs to suit the tastes of specific
individuals and locations.
4.a) Local marketing
4.b) Individual marketing
4.a) Local marketing involves tailoring brands and
promotion to the needs and wants of local customer
groups
4.b) Individual marketing involves tailoring products and
marketing programs to the needs and preferences of individual
customers.
Choosing a Targeting Strategy depends on:
• Company resources
•Competitor’s marketing strategies
•Product Life cycle
III. Differentiation and Positioning
Product position is the way the product is defined by
consumers on important attributes—the place the product
occupies in consumers’ minds relative to competing products
Competitive advantage is an advantage over competitors
gained by offering consumers greater value, either through
lower prices or by providing more benefits that justify higher
prices.
Identifyinga set of possible competitive advantages to build a
position by providing superior value from:
Product differentiation
Service differentiation
Channel differentiation
People differentiation
Image differentiation
Positioning Strategies
1. More Benefits for More Price
2. More Benefits for The Same Price
3. More Benefits For Less Price
4. Same Benefits For Less Price
5. Less Benefits for Less Price
Developing a Positioning Statement
To (target segment and need) our (brand) is (concept) that
(point of difference).
To (youth of age groups between 25-35 who wants to
take good care of their health) (Select Cookie) is (a tasty
low fat cookie) that (gives you the best tasting yet guilt
free pleasure so you can stay in control of your weight
and health)
