marketing: an introduction market segmentation, targeting, and positioning for competitive advantage...

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nMarket Segmentation, Targeting, and

Positioning for Competitive Advantage

•Chapter Seven•Lecture Slides

–Express Version

•Course•Professor•Date

©Copyright 2004, Pearson Education Canada Inc.7-2

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nLooking Ahead

• After studying this chapter, you should be able to:

• Define the three steps of target marketing: market segmentation, market targeting, and market positioning

• List and discuss the major levels of market segmentation and bases for segmenting consumer and business markets

• Explain how companies identify attractive market segments and choose a market coverage strategy

• Discuss how companies position their products for maximum competitive advantage in the marketplace


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nSegmentation, Targeting, and Positioning

Develop profiles ofresulting segments

MarketSegmentation

Develop measures ofsegment attractiveness

Select thetarget segment(s)

Develop positioningfor each segment

Develop marketing mixfor each segment

Identify bases forsegmenting market

Markettargeting

Marketpositioning

Figure 7-1


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nLevels of Market Segmentation

Mass marketing

Segment marketing

Niche marketing

Micromarketing

Figure 7-2


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nMajor Segmentation Variables

• Consumer market:– Geographic

• National, regional, local, city size, density of population, and climate

– Demographic• Age, gender, family size/life cycle, income,

occupation, education, religion, and ethnic origin– Psychographic

• Lifestyle, personality– Behavioural

• Purchase occasion, benefits sought, user status, usage rate, loyalty status, readiness state, and attitude towards product

Table 7-1


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nEffectiveness of Segmentation

• To be useful, market segments must be: – Measurable– Accessible– Substantial– Differentiable– Actionable

• Segments should be evaluated for:– Size– Growth characteristics– Structural attractiveness

– Compatibility with company objectives and resources


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nSelecting Market Segments

CompanyMarketing Mix

Market

Undifferentiated marketing

CompanyMarketing Mix 1



Segment 1

Segment 2

Segment 3

Differentiated marketing

CompanyMarketing Mix

Segment 1Segment 2Segment 3

Concentrated marketing

Figure 7-3


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nChoosing a Market Coverage Strategy

• Will depend upon:– Company resources– Degree of product variability– Product life cycle stage– Market viability– Competitors’ marketing strategies


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nPositioning for Competitive Advantage

• Product position: the way the product is defined by consumers on important attributes, relative to competing products

• Three Important Steps:– Identifying a set of possibly competitive advantages

upon which to build a position– Choosing the right competitive advantages– Selecting an overall positioning strategy


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nChoosing a Positioning Strategy

• Differences need to be:– Important– Distinctive– Superior– Communicable– Preemptive– Affordable– Profitable

• Value proposition: the full mix of benefits on which a product/brand is positioned


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nPossible Value Propositions

Morefor

more

Morefor thesame

Morefor

less

The samefor

less

Less formuchless

Figure 7-4

More LessThe same

More

The same

Less

Price

Benefits


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nLooking Back

• Market segmentation, targeting, and positioning

• Levels of segmentation• Bases of segmentation• Market coverage

strategy• Positioning products for

competitive advantage

marketing: an introduction market segmentation, targeting, and positioning for competitive advantage...

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