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Chapter 7

PRINCIPLES OF MARKETING Eighth Edition Philip Kotler and Gary Armstrong. Chapter 7. Market Segmentation, Targeting, and Positioning for Competitive Advantage. Steps in Segmentation, Targeting, and Positioning. 6. Develop Marketing Mix for Each Target Segment. Market Positioning.

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Chapter 7

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  1. PRINCIPLES OF MARKETING Eighth Edition Philip Kotler and Gary Armstrong Chapter 7 Market Segmentation, Targeting, and Positioning for Competitive Advantage

  2. Steps in Segmentation, Targeting, and Positioning 6. Develop Marketing Mix for Each Target Segment Market Positioning 5. Develop Positioning for Each Target Segment 4. Select Target Segment(s) Market Targeting 3. Develop Measures of Segment Attractiveness 2. Develop Profiles of Resulting Segments Market Segmentation 1. Identify Bases for Segmenting the Market

  3. Mass Marketing Same product to all consumers (no segmentation) Segment Marketing Different products to one or more segments (some segmentation) Step 1. Market SegmentationLevels of Market Segmentation Niche Marketing Different products to subgroups within segments ( more segmentation) Micromarketing Products to suit the tastes of individuals or locations (complete segmentation)

  4. Step 1. Market SegmentationBases for Segmenting Consumer Markets Geographic Nations, states, regions or cities Demographic Age, gender, family size and life cycle, or income Psychographic Social class, lifestyle, or personality Behavioral Occasions, benefits, uses, or responses

  5. Using Multiple SegmentationBases: Geodemographics

  6. Step 1. Market SegmentationBases for Segmenting Business Markets Personal Characteristics Demographics Bases for Segmenting Business Markets Situational Factors Operating Characteristics Purchasing Approaches

  7. Step 1. Market SegmentationBases for Segmenting International Markets Industrial Markets Political/ Legal Geographic Economic Cultural Intermarket

  8. Measurable Step 1. Market SegmentationRequirements for Effective Segmentation Accessible Substantial • Size, purchasing power, profiles • of segments can be measured. • Segments must be effectively • reached and served. Differential • Segments must be large or profitable enough to serve. Actionable • Segments must respond differently to different marketing mix elements & actions. • Must be able to attract and serve the segments.

  9. Segment Size and Growth Analyze sales, growth rates and expected profitability. Segment Structural Attractiveness Consider effects of: Competitors, Availability of Substitute Products and, the Power of Buyers & Suppliers. Company Objectives and Resources Company skills & resources relative to the segment(s). Look for Competitive Advantages. Step 2. Market TargetingEvaluating Market Segments

  10. Market Company Marketing Mix Step 2. Market TargetingMarket Coverage Strategies Company Marketing Mix 1 Segment 1 Company Marketing Mix 2 Segment 2 A. Undifferentiated Marketing Segment 3 Company Marketing Mix 3 Segment 1 Company Marketing Mix Segment 2 B. Differentiated Marketing Segment 3 C. Concentrated Marketing

  11. Step 2. Market TargetingChoosing a Market-Coverage Strategy Company Resources Product Variability Product’s Stage in the Product Life Cycle Market Variability Competitors’ Marketing Strategies

  12. Product’s Position - the place the product occupies in consumers’ minds relative to competing products; i.e. Volvo positions on “safety”. Marketers must: Plan positions to give products the greatest advantage Develop marketing mixes to create planned positions Step 3. Positioning for Competitive Advantage

  13. G H C A D E B F Step 3. Positioning for Competitive Advantage: Strategies Product Class Product Attributes Away from Competitors Benefits Offered Usage Occasions Against a Competitor Users

  14. Step 1. Identifying a set of possible competitive advantages: Competitive Differentiation. Step 2. Selecting the right competitive advantage. Step 3. Effectively communicating adn delivering the chosen position to the market. Steps to Choosing and Implementing a Positioning Strategy

  15. Product Service Areas for Competitive Differentiation Developing Competitive Differentiation Personnel Image

  16. Selecting the Right CompetitiveAdvantages Important Profitable Distinctive Criteria for Determining Which Differences to Promote Affordable Superior Communicable Preemptive

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