Chapter 6 Segmentation, Targeting, and Positioning PDF

Chapter 6 Segmentation, Targeting, and Positioning © 2023 McGraw Hill Limited 6-1  Chapter 6: Segmentation, Targeting, and Positioning LEARNING OBJECTIVES LO1 Describe the bases marketers use to seg...

Chapter 6 Segmentation, Targeting, and Positioning © 2023 McGraw Hill Limited 6-1  Chapter 6: Segmentation, Targeting, and Positioning LEARNING OBJECTIVES LO1 Describe the bases marketers use to segment a market LO2 Identify the criteria for determining the attractiveness of a segment & whether it is worth pursuing (targeting) LO3 Explain the differences among targeting strategies: undifferentiated, differentiated, concentrated, or micromarketing LO4 Describe positioning & how firms do it © 2023 McGraw Hill Limited 6-2  Segmentation, Targeting, & Positioning ⚫ Who is the target market for SoCIAL LITE Vodka? ⚫ Product location strategy ⚫ Multiple segmentation strategies were employed © 2023 McGraw Hill Limited 6-3 The segmentation-targeting-position process © 2023 McGraw Hill Limited 6-4  Step 1: Establish Overall Strategy or Objectives Consistent with mission statement Derived from mission & current state © 2023 McGraw Hill Limited 6-5  Step 2: Segmentation Bases Segmentation Sample Segments Base Geographic Continent (North America, Asia, Europe, Africa), country, region (West Coast, Prairies, Central, Maritimes), province, city, urban, suburban, rural, climate Demographic Age, gender, income, education, occupation, race, marital status, family size, family life cycle, religion, ethnic background (white, black, Asian, Indian, German, Irish, Arab), generational cohort (baby boomer, Generation X, Generation Y), home ownership Psychographic Lifestyle (Innovators, Thinkers, Achievers, Experiencers, Believers, Strivers, Makers, Survivors), personality/self-concept (conservative, liberal, adventuresome, outgoing, health- and fitness-conscious), social class (upper class, middle class, working class) Behavioural Benefits sought (convenience, economy, prestige, quality, speed, service, environmental impact), usage (heavy, moderate, light, non-user, ex-user, potential user, first-time user), loyalty (not loyal, somewhat loyal, completely loyal) © 2023 McGraw Hill Limited 6-6  Geographic Segmentation ⚫ Divide market into separate geographic units ⚫ Countries, regions provinces, cities, neighbourhoods, climate, etc. ⚫ Develop appropriate marketing programs © 2023 McGraw Hill Limited 6-7  Demographic Segmentation ⚫ Most common method ⚫ Divide market into groups based on: – gender – age – ethnic group – family lifecycle stage – household type – income – Other, e.g. occupation, education, religion ⚫ Census excellent source of segmentation data © 2023 McGraw Hill Limited 6-8  Psychographic Segmentation How consumers describe themselves: ⚫ Self-values ⚫ Self-concept ⚫ Lifestyles Marketers such as MEC want their ads to appeal to one’s self-concept. “I’m like them, so I should buy their products.” © 2023 McGraw Hill Limited 6-9  DESCRIPTION OF VALS CATEGORIES Innovators Thinkers Believers Achievers Successful, Old guard, respect Hold conservative belief Goal-oriented sophisticated, take- authority systems, deep-rooted professionals charge people Well-educated moral codes View money as source High-esteem Mature, satisfied, Value family, religion, of authority Change leaders, open comfortable community Deep commitment to to new ideas and Carefully research and Value stability career, family technology plan before taking Dislike ambiguity Respect authority and Actively seek new action Not looking to change the status quo information Appreciate historical society Active consumers Experiment with perspective Predictable, loyal Favour prestige confidence, future Act in accordance with consumers products, conscious of oriented what’s right Choose familiar peers Problem-solvers Not influenced by latest products, established Embrace technology Active consumers, trends brands with productivity cultivated tastes benefits Strivers Experiencers Makers Survivors Live in the moment Seek variety, excitement Practical people with Oldest consumers Trendy, fun-loving Enthusiastic, impulsiveconstructive skills Cautious, risk averse, Money defines success consumers Strong mechanical and feel world is changing Favour stylish products Want it all mentality automotive interests too fast Revolving rates of Active in sports and Traditional views of Concern for safety, temporary social activities family, work, gender security unemployment Heightened sense of roles Comfortable with Looking for a better life, visual stimulation Protect what they see routine and the familiar not easily achieved Keep up with latest as theirs Loyal to favourite Active yet impulsive fashions Value self-sufficiency brands consumers Want to look good, Suspicious of new ideas Laggards in technology have cool stuff Unimpressed with Focus on needs vs. material possessions © 2023 McGraw Hill Limited wants 6-10  VALS TYPES It is just as easy to identify Thinkers (left) as it is Makers (right). A person is given the VALS questionnaire, and the VALS program at SRIC-BI runs the answers through the computer for scoring to determine the VALS type. © 2023 McGraw Hill Limited 6-11 Behavioural Segmentation Benefits Behavioural Usage Occasion Segmentation Rate Loyalty © 2023 McGraw Hill Limited 6-12  Geodemographic Segmentation ⚫ How consumers describe themselves using a combination of geographic, demographic, and lifestyle characteristics to segment a market. ⚫ “Birds of a feather flock together.” © 2023 McGraw Hill Limited 6-13  Geodemographic Segmentation PSYTE clusters Cluster Urban Lower Middle (U4): Suburban Affluent (S1): Suburban Affluent (S1): Name Urban Bohemia Suburban Affluence Asian Heights Description From body piercing to This cluster with a flair for fine Asian ancestries combined with tattoos, Urban Bohemia living represents both old and hard work and growing wealth includes a diverse population new wealth. Because wealth create and mould these upscale by design. A neighbourhood accumulates throughout life neighbourhoods. Asian Heights with a youthful skew, this stages, this cluster exhibits an represents the affirmation of cluster occupies itself in older skew with many empty dreams cultivated through a variety of artistic, retail, nests. Suburban Affluence generations of immigrants and and generally creative indexes high on managerial often through hardship. These employment. Men and and technical employment families boost local economies women employed in cultural, and are married with children. as well as family prospects. artistic, and entertainment Asian Heights indexes high related on Chinese, Korean, and jobs abound. Japanese immigration as well Household maintainers under as households of six or more age 25, many with college persons. degrees, are also Average $46,000 $166,000 $96,000 Household Income Source: Used by permission of Pitney Bowes Software. © 2023 McGraw Hill Limited 6-14 Step 3: Evaluate Segment Attractiveness © 2023 McGraw Hill Limited 6-15  Identifiable ⚫ Who is in their The Gap has identified several distinct segments to pursue. market? Two of its brands: Gap (left) and Gap Kids (below) appeal to different target markets. ⚫ Are the segments unique? ⚫ Does each segment require a unique marketing mix? © 2023 McGraw Hill Limited 6-16  Reachable Know the product exists Understand what it can do Recognize how to buy La Senza must ensure that any new segment it considers is identifiable, reachable, responsive, substantial, and profitable. © 2023 McGraw Hill Limited 6-17  Responsive Customers must: ⚫ React positively to firm’s offering ⚫ Move toward the firm’s products/services ⚫ Accept the firm’s value proposition © 2023 McGraw Hill Limited 6-18  Substantial & Profitable ⚫ Size matters ⚫ Too small & the segment is insignificant, & will not be profitable ⚫ Growth potential equally important Which segment will be more profitable to Mark’s: its traditional market for industrial workwear (above), or the top-line casual apparel segment (right)? © 2023 McGraw Hill Limited 6-19  Segment Profitability – How to Determine? Segment size (# of people in segment) = 60 million (