Chapter 9

Report
Chapter 9
MARKETING
SEGMENTATION,
TARGETING, AND
POSITIONING
© 2014 Cengage Learning. All Rights Reserved. May
not be scanned, copied or duplicated, or posted to a
publicly accessible website, in whole or in part.
1
Chapter 9 Marketing Segmentation, Targeting and Positioning
Objectives
1. Identify the essential components of a
market.
2. Outline the role of market segmentation
in developing a marketing strategy.
3. Describe the criteria necessary for
effective segmentation.
4. Explain the geographic approach to
segmenting consumer markets.
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Chapter 9 Marketing Segmentation, Targeting and Positioning
Objectives
5. Discuss the demographic approach to
segmenting consumer markets.
6. Outline the psychographic approach to
segmenting consumer markets.
7. Describe product-related segmentation.
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Chapter 9 Marketing Segmentation, Targeting and Positioning
Objectives
8. Discuss the four basic strategies for
reaching target markets.
9. Summarize the types of positioning
strategies, and explain the reasons for
positioning and repositioning products.
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Chapter 9 Marketing Segmentation, Targeting and Positioning
Introduction
▮ Market - Group of people with sufficient
purchasing power, authority, and
willingness to buy
▮ Target market - Group of people a firm
believes is most likely to buy its goods and
services
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Chapter 9 Marketing Segmentation, Targeting and Positioning
Types of Markets
▮ Consumer products - Products bought by
ultimate consumers for personal use
▮ Business products - Goods and services
purchased for use either directly or
indirectly in the production of other goods
and services for resale
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Chapter 9 Marketing Segmentation, Targeting and Positioning
Types of Markets
▮ A product can be either a consumer product
or business product, depending on its use
• Example: Tires can be purchased by consumers
for the family car or by General Motors for its
production line
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Chapter 9 Marketing Segmentation, Targeting and Positioning
The Role of Market Segmentation
▮ Marketing strategies must be adjusted to
meet the needs of different consumer
groups
▮ Market segmentation - Division of the total
market into smaller, relatively homogenous
groups
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Chapter 9 Marketing Segmentation, Targeting and Positioning
Criteria for Effective Segmentation
▮ The market segment must present
measurable purchasing power and size
▮ Marketers must find a way to effectively
promote and serve the market segment
▮ Segment must be sufficiently large to offer
good profit potential
▮ Firm must aim for segments that match its
marketing capabilities
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Chapter 9 Marketing Segmentation, Targeting and Positioning
Segmenting Consumer Markets
•
•
•
•
Geographic segmentation
Demographic segmentation
Psychographic segmentation
Product-related segmentation
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Chapter 9 Marketing Segmentation, Targeting and Positioning
Geographic Segmentation
▮ Division of an overall market into
homogenous groups based on their
locations
▮ Marketers look at:
• Economic variables
• Geographic indicators
• Migration patterns
▮ Pay close attention to fastest-growing
states
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Chapter 9 Marketing Segmentation, Targeting and Positioning
Geographic Segmentation
▮ Government now classifies urban data using
several categories
Core based statistical area (CBSA)
Metropolitan statistical area (MSA)
Micropolitan statistical area
Consolidated metropolitan statistical area
(CMSA)
• Primary metropolitan statistical area
(PMSA)
•
•
•
•
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Chapter 9 Marketing Segmentation, Targeting and Positioning
Using Geographic Segmentation
▮ Marketers focus on core regions, those
from which they draw 40 to 80 percent of
sales
▮ Residence location within a region is an
important variable
▮ Provides useful distinctions when regional
preferences or needs exist
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Chapter 9 Marketing Segmentation, Targeting and Positioning
Geographic Information Systems (GISs)
▮ Computer systems that assemble, store,
manipulate, and display data by location
▮ Simplifies the job of analyzing geographic
marketing information
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Chapter 9 Marketing Segmentation, Targeting and Positioning
Geographic Information Systems (GISs)
▮ Number of companies benefit from using a
GIS
•
•
•
•
•
Locate new outlets
Assign sales territories
Plan distribution centers
Map out the most efficient delivery routes
Example: Google Earth, allows users to view
different parts of the country at a close up
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Chapter 9 Marketing Segmentation, Targeting and Positioning
Demographic Segmentation
▮ Division of an overall market into
homogenous groups based on:
•
•
•
•
•
•
Gender and age
Income and occupation
Education
Sexual orientation
Household size
Stage in the family life cycle
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Chapter 9 Marketing Segmentation, Targeting and Positioning
Segmenting by Gender
▮ Lines blurring in recent years
▮ Example: Men buying skin-care products
and women buying power tools and trucks
▮ Female consumers who regularly use the
Internet make most of the decisions about
retail items
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Chapter 9 Marketing Segmentation, Targeting and Positioning
Segmenting by Age
▮ Has become blurred as consumers’ roles
and needs change
• Example: St. Joseph’s baby aspirin now
marketed to adults to help prevent heart
disease
▮ School-age children have significant
influence over family purchases
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Chapter 9 Marketing Segmentation, Targeting and Positioning
Tweens and Teens
▮ Influence billions of dollars of family
purchases
▮ Marketers could describe this group as
being interactive
▮ Companies that target this group have
expanded their product lines
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Chapter 9 Marketing Segmentation, Targeting and Positioning
Generation X
▮ Born between 1968 and 1979
▮ Family-oriented, well educated, and
optimistic
▮ TV is an important marketing tool
▮ Prefer goods and services that support
certain causes
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Chapter 9 Marketing Segmentation, Targeting and Positioning
Baby Boomers
▮ Born between 1946 and 1964
▮ Popular segment because of their numbers
and income levels
▮ Lucrative segment for many marketers
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Chapter 9 Marketing Segmentation, Targeting and Positioning
Seniors
▮ High discretionary income
▮ High rates of home ownership
▮ Spend money conservatively, but indulge in
luxury
▮ Not likely to be the first to try new products
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Chapter 9 Marketing Segmentation, Targeting and Positioning
The Cohort Effect
▮ Tendency of members of a generation to be
influenced and bound together by significant
events in their formative year
• Ages 17 to 22
▮ The current cohort (born during the late 1970s
to the early 1990s) may be the most cohesive
to date
• Generation Y, the Millennial Generation, Generation
Next, Echo Boomers, and the 9–11 Generation
• Video Game Generation
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Chapter 9 Marketing Segmentation, Targeting and Positioning
Hispanics and African Americans
▮ Largest ethnic/minority groups in U.S.
▮ Hispanic population is growing much faster
than the African American population
▮ Many companies find it a challenge to reach
Hispanic consumers and turn them into
customers
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Chapter 9 Marketing Segmentation, Targeting and Positioning
Asian Americans
▮ Fastest growing segment of the U.S.
population
▮ Fastest-growing income
▮ Population is concentrated in fewer
geographic areas than other ethnic markets
▮ Very diverse group
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Chapter 9 Marketing Segmentation, Targeting and Positioning
Native Americans
▮ Current population 5 million, 1.7 percent of
the total U.S. population
▮ Businesses are growing
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Chapter 9 Marketing Segmentation, Targeting and Positioning
People of Mixed Race
▮ The ability to select more than one racial
category on census forms has been recently
introduced
▮ About 9 million U.S. residents classify
themselves this way
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Chapter 9 Marketing Segmentation, Targeting and Positioning
Segmenting by Family Life Cycle Stages
▮ Family lifecycle - Process of family
formation and dissolution
▮ Life stage, not age, is primary concern of
marketer
▮ Empty nesters may have higher disposable
incomes and spend more on premium items
▮ Increase in "boomerangs"—grown children
who have returned home to live with their
parents
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Chapter 9 Marketing Segmentation, Targeting and Positioning
Segmenting by Household Type
▮ Average household size in U.S. has
decreased from 5.8 in 1790 to less than 3
today
▮ U.S. households embody a wide range of
diversity
▮ Growing number of same-sex couples who
share households
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Chapter 9 Marketing Segmentation, Targeting and Positioning
Segmenting by
Income and Expenditure Patterns
▮ Engel’s laws - As household income
increases:
• A small percentage of expenditures goes for
food
• Percentage spent on housing, household
operations, and clothing remains constant
• Percentage spent on recreational and
educational items increases
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Chapter 9 Marketing Segmentation, Targeting and Positioning
Demographic Segmentation Abroad
▮ Source of global demographic information
• International Programs Center (IPC) at the U.S.
Census Bureau
▮ Private marketing research firms can
supplement government data
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Chapter 9 Marketing Segmentation, Targeting and Positioning
What is Psychographic Segmentation?
▮ Division of a population into groups that
have similar attitudes, values, and lifestyles
▮ AIO statements - Items on lifestyle surveys
that describe various activities, interests,
and respondents’ opinions
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Chapter 9 Marketing Segmentation, Targeting and Positioning
Psychographic Segmentation of Global
Markets
▮ Roper ASW identified six psychographic
consumer segments that exist in 35
countries studied:
• Strivers - Value professional and material goals
more than the other groups
• Devouts - Value duty and tradition
• Altruists - Emphasize social issues and societal
well-being
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Chapter 9 Marketing Segmentation, Targeting and Positioning
Psychographic Segmentation of Global
Markets
• Intimates - Value family and personal
relationships
• Fun seekers - Focus on personal enjoyment and
pleasurable experiences
• Creatives - Seek education, technology, and
knowledge
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Chapter 9 Marketing Segmentation, Targeting and Positioning
Using Psychographic Segmentation
▮ Quantify aspects of consumers’
personalities and lifestyles
▮ Plan and promote more effectively
▮ Acts as a good supplement to geographic
and demographic segmentation
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Chapter 9 Marketing Segmentation, Targeting and Positioning
Product-Related Segmentation
▮ Division of a population into homogeneous
groups based on their relationships to a
product
▮ Segmenting by benefits sought
• Focuses on the benefits people expect from
using the product
• Example: Women who work out at Curves want
to look their best and feel healthy
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Chapter 9 Marketing Segmentation, Targeting and Positioning
Product-Related Segmentation
▮ Segmenting by usage rates
• 80/20 principle (Praedo’s law) - 80 percent of
a product’s revenues come from 20 percent of
its customers
• Marketers may target heavy, moderate, light
users or nonusers
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Chapter 9 Marketing Segmentation, Targeting and Positioning
Product-Related Segmentation
▮ Segmenting by brand loyalty
• Example: Frequent purchaser programs
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Chapter 9 Marketing Segmentation, Targeting and Positioning
Product-Related Segmentation
▮ Using multiple segmentation bases
• Segmentation helps marketers increase their
accuracy in reaching the right markets
• Segmentation helps marketers to know their
potential customers better
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Chapter 9 Marketing Segmentation, Targeting and Positioning
The Market Segmentation Process
▮ Develop a relevant profile for each segment
• In-depth analysis helps managers accurately
match buyers’ needs with the firm’s marketing
offerings
▮ Forecast market potential
• Market potential sets the upper limit on the
demand competing firms can expect from a
segment
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Chapter 9 Marketing Segmentation, Targeting and Positioning
The Market Segmentation Process
▮ Forecast probable market share
• Comes from analysis of competitors’ market
position and development of marketing strategy
▮ Select specific market segments
• Use demand forecasts and cost projections to
determine profits and the return on investment
from each segment
• Marketers weigh more than monetary costs
and benefits
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Chapter 9 Marketing Segmentation, Targeting and Positioning
Strategies for Reaching Target Markets
▮ Undifferentiated marketing
• Strategy that focuses on producing a single
product and marketing it to all customers; also
called mass marketing
▮ Differentiated marketing
• Strategy that focuses on producing several
products and pricing, promoting, and
distributing them with different marketing
mixes designed to satisfy smaller segments
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Chapter 9 Marketing Segmentation, Targeting and Positioning
Concentrated Marketing
▮ Focusing marketing efforts on satisfying a
single market segment; also called niche
marketing
▮ Approach can appeal to small firms or to firms
that
offer highly specialized goods and services
▮ Example: Peanut Butter & Co, which appeals to
peanut butter lovers
▮ Can backfire if competitors target the same
niche or if market decreases
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Chapter 9 Marketing Segmentation, Targeting and Positioning
Micromarketing
▮ Targeting potential customers at very
narrow, basic levels
▮ Internet makes micromarketing more
effective
▮ Firms can suffer if market is too small and
specialized to be profitable
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Chapter 9 Marketing Segmentation, Targeting and Positioning
Selecting and Executing a Strategy
▮ Basic determinants of marketing strategy
•
•
•
•
Company resources
Product homogeneity
Stage in the product lifestyle
Competitors’ strategies
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Chapter 9 Marketing Segmentation, Targeting and Positioning
Positioning
▮ Placing a product at a certain point or
location within a market in the minds of
prospective buyers
▮ Possible approaches
•
•
•
•
•
Attributes
Price/quality
Competitors
Application
Product user/class
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Chapter 9 Marketing Segmentation, Targeting and Positioning
Positioning
▮ Distinguishes firm’s offerings from its
competitors’
▮ Marketers may develop a positioning map
and reposition a product as necessary
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Chapter 9 Marketing Segmentation, Targeting and Positioning
Nederlander Video
http://www.cengage.com/marketing/book_content/boone_9781133628460
/videos/ch09.html
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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