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CHAPTER 7
SEGMENTATION,
TARGETING, AND
POSITIONING
MARKET SEGMENTATION
Represents an effort to identify and categorize
groups of customers and countries according
to common characteristics
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SeniorsSeniors
BoomersBoomers
Generation X
Generation X
Generation Y
Generation Y
MillennialsMillennials
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TARGETING
The process of evaluating segments and focusing
marketing efforts on a country, region, or
group of people that has significant potential
to respond
Focus on the segments that can be reached
most effectively, efficiently, and profitably
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POSITIONING
Positioning is required to differentiate the
product or brand in the minds of the target
market.
GLOBAL MARKET SEGMENTATION
Defined as the process of identifying specific
segments—whether they be country groups or
individual consumer groups—of potential
customers with homogeneous attributes who are
likely to exhibit similar responses to a company’s
marketing mix
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Upper
Middle
Lower
CONTRASTING VIEWS OF GLOBAL
SEGMENTATION
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Conventional wisdomConventional wisdom Assumes heterogeneity among countries Assumes homogeneity within a country Focuses on macro-level cultural differences Relies on clustering of national markets Less emphasis on within-country segments
Unconventional wisdomUnconventional wisdom Assumes emergence of segments that transcend national boundaries Recognizes existence of within-country differences Emphasizes micro-level differences Segments micro markets within and among countries
GLOBAL MARKET SEGMENTATION
Demographics
Income Population Age distribution Gender Education Occupation
Psychographics
Behavioral characteristics
Benefits sought
What are the trends?^ 7-
SEGMENTING BY INCOME & POPULATION
Income is a valuable segmentation variable 75% of world GNP is generated in the triad but only 13% of the world’s population is in the triad
Do not read into the numbers Some services are free in developing nations so there is more purchasing power Feeds into Purchasing Power Parity
For lower prices items population is a more important variable (^) 7-
AGE SEGMENTATION
Global teensGlobal teens— young people between the ages of 12 and 19 A group of teenagers randomly chosen from different parts of the world will share many of the same tastes
Global eliteGlobal elite— affluent consumers well traveled money to spend on prestigious products with an image of exclusivity
SeniorsSeniors Pensioners or Retirees Treatment and needs vary in region (^) 7-
GENDER SEGMENTATION
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In focusing on the
needs and wants of one
gender, do not miss
opportunities to serve
the other
Companies may offer
product lines for both
genders
Nike, Levi Strauss
- Grouping people according to attitudes, values, and lifestyles
- SRI International and VALS 2
PSYCHOGRAPHIC SEGMENTATION (^) CLASS SEGMENTATION
Fall 2008
Innovator/Experiencer Striver/Experiencer Maker/Experiencer Experiencer/Striver Experiencer/Maker Striver/Thinker Experiencer/Innovator Striver/Believer Experiencer/Achiever Experiencer
ETHNIC SEGMENTATION
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The population of many countries includes ethnic groups of
significant size.
South Africa- MANY tribles
Three main ethnic groups in U.S.
African-Americans, Asian-Americans, and Hispanic Americans 40-plus million Hispanic Americans (14% of total population) with $ billion annual buying power CA Mexicans have after-tax income of $100 billion Hispanic teens will rise from 12 to 18 percent of the U.S. teen population in the next decade.
What other ethnic groups have minority status? What about European descent Americans-Native Americans? 7-
The Best Source for Levi's® Original Jeans & AuthenticClothing for Men, Women and Kids
Privacy Policy | © 2008 LeviStrauss & Co USA
ASSESSING MARKET
POTENTIAL
PitfallsPitfalls
Overstating the size and short-term attractiveness
Fear of missing out on a strategic opportunity
Management’s network of contacts is primary
criterion for decision
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ASSESSING MARKET POTENTIAL
Three basic criteriaThree basic criteria
Current sizeCurrent size of market segment growth potential
CompetitionCompetition How much Strength Vunerability
CompatibilityCompatibility company’s overall objectives feasibility of success with the target audience 7-
FRAMEWORK FOR SELECTING TARGET
MARKETS
Begin with demographic information
Product-market must be considered
Market defined by product category
Consider marketing model drivers
Factors required for a business to take root and
grow
Are there any enabling conditions present?
Conditions whose presence or absence will
determine success of the marketing model 7-
MM
ETAPHORIAETAPHORIA
Introduction to Deep Metaphors
Balance Justice, Equilibrium, and the Interplay of Elements Transformation Changes in Substance and Circumstances Journey Meeting of Past, Present, and Future Container Inclusion, Exclusion, and other Boundaries Connection Need to relate to Oneself and Others Resource Acquisitions and the consequences
Control Sense of Mastery, Vulnerability, and Well- Being
Gerald Zaltman and Lindsay Zaltman
METAPHORIA ^ Strand of pearls Circle of life Pinkish red flower New baby girl Vase Shape of her life Faded flowers All the phases already gone through Female elephant at edge of circle People who share a great deal of time with the daughter Diamond – hovering above Daughter’s birthstone Purity, brilliance and clarity Life, happiness, and learning Clock and juggler Not enough time for daughter and self Juggling life balances Bathtub Escape for the mother Toys on the left Future learning and growth
“Coming Full Circle”- new mother
Metaphors
YOUR METAPHORIA ASSIGNMENT
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Choose ten pictures
to represent some
aspect of your life
Arrange according to
importance
Prepare a list with the
meaning of each item
20 points possible
Balance
Transformation
Journey
Container
Connection
Resource
Control
Create a collage
Choose one of the metaphors for defining your situation
NINE QUESTIONS FOR CREATING A
PRODUCT-MARKET PROFILE
Who buys our product?
Who does NOT buy it?
What need or function does it serve?
Is there a market need that is not being met by
current product/brand offerings?
What problem does our product solve?
What are customers buying to satisfy the need for
which our product is targeted?
What price are customers paying?
When is the product purchased (& how often)?
Where is it purchased?
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Target Market
Strategies
Standardized
(Mass)
Intensive Distribution Undifferentiated target marketing Minimal Product Adaptation Standardized Marketing Mix
Concentrated
(Niche)
Looking for depth in a single market segment versus breadth in national markets
Differentiated
(Multi-Segment)
Two or more distinct markets
Wider market coverage
POSITIONING
Locating a brand in consumers’ minds over and
against competitors in terms of attributes and
benefits that the brand does and does not
offer
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Attribute orbenefit^ • Volvo- safety
Quality and price
- Loreal- because I’m worth it
Use or user
- Bayer Aspirin – recommended by Doctors
Competition
- The Body Shop- natural ingredients, no animal testing
POSITIONING STRATEGIES
Global consumer culture positioningGlobal consumer culture positioning Identifies the brand as a symbol of a particular global culture or segment High-touch and high-tech products
Foreign consumer culture positioningForeign consumer culture positioning Associates the brand’s users, use occasions, or product origins with a foreign country or culture
Local consumer culture positioningLocal consumer culture positioning Identifies with local cultural meanings Consumed by local people Locally produced for local people Used frequently for food, personal, and household nondurables Ex: Budweiser is identified with small-town America
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