Marketing Segmentation, Targeting, & 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 t...

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 Segmentati Sample Segments on 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 Psychographi Lifestyle (Innovators, Thinkers, Achievers, Experiencers, c 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  Test Your Knowledge Geographic segmentation is most useful for companies whose products satisfy needs that vary by __________. A) gender B) region C) age D) nationality © 2023 McGraw Hill Limited 6-8  Test Your Knowledge Geographic segmentation is most useful for companies whose products satisfy needs that vary by __________. A) gender B) region C) age D) nationality © 2023 McGraw Hill Limited 6-9  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 6-10  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 6-11  DESCRIPTION OF VALS CATEGORIES Innovators Successful, Thinkers Old guard, respect Believers Hold conservative Achievers Goal-oriented sophisticated, authority belief systems, professionals take-charge people Well-educated deep-rooted moral View money as High-esteem Mature, satisfied, codes source of authority Change leaders, comfortable Value family, Deep commitment open to new ideas Carefully research religion, to career, family and technology and plan before community Respect authority Actively seek new taking action Value stability and the status quo information Appreciate Dislike ambiguity Active consumers Experiment with historical Not looking to Favour prestige confidence, future perspective change society products, oriented Act in accordance Predictable, loyal conscious of peers Problem-solvers with what’s right consumers Embrace Active consumers, Not influenced by Choose familiar technology with cultivated tastes latest trends products, productivity established brands benefits Strivers Experiencers Makers Survivors Live in the Seek variety, Practical people Oldest consumers moment excitement with constructive Cautious, risk Trendy, fun-loving Enthusiastic, skills averse, feel world Money defines impulsive Strong mechanical is changing too success consumers and automotive fast Favour stylish Want it all interests Concern for safety, products mentality Traditional views of security Revolving rates of Active in sports family, work, Comfortable with temporary and social gender roles routine and the unemployment activities Protect what they familiar Looking for a Heightened sense see as theirs Loyal to favourite better life, not of visual Value self- brands easily achieved © 2023 McGraw Hill Limited stimulation sufficiency Laggards in 6-12  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 6-13 Behavioural Segmentation Benefit s Behaviour Occasi al Usage on Segmenta Rate tion Loyalty © 2023 McGraw Hill Limited 6-14  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 6-15  Geodemographic Segmentation PSYTE clusters Cluster Urban Lower Middle Suburban Affluent Suburban Affluent Name (U4): (S1): (S1): Urban Bohemia Suburban Affluence Asian Heights Descript From body piercing to This cluster with a flair for Asian ancestries ion tattoos, Urban Bohemia fine combined with includes a diverse living represents both old hard work and growing population and wealth by design. A new wealth. Because create and mould these neighbourhood wealth upscale with a youthful skew, this accumulates throughout neighbourhoods. Asian cluster occupies itself in life Heights a variety of artistic, retail, stages, this cluster represents the affirmation and generally creative exhibits an of employment. Men and older skew with many dreams cultivated women employed in empty through cultural, nests. Suburban Affluence generations of artistic, and indexes high on immigrants and entertainment related managerial often through hardship. jobs abound. and technical These Household maintainers employment families boost local under and are married with economies age 25, many with children. as well as family college prospects. degrees, are also Asian Heights indexes © 2023 McGraw Hill Limited high 6-16  Test Your Knowledge Which of the following tools is widely used for geodemographic segmentation? A) PSYTE B) LSAT C) GNP D) LIMRA © 2023 McGraw Hill Limited 6-17  Test Your Knowledge Which of the following tools is widely used for geodemographic segmentation? A) PSYTE B) LSAT C) GNP D) LIMRA © 2023 McGraw Hill Limited 6-18  Step 3: Evaluate Segment Attractiveness © 2023 McGraw Hill Limited 6-19  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 6-20  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 6-21  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 6-22  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 6-23  Segment Profitability – How to Determine? Segment size (# of people in segment) = 60 million (