chapter 4 MARKET SEGMENTATION, TARGETING AND POSITIONING

1. part two: making sense of markets chapter 4MARKET SEGMENTATION, TARGETING AND POSITIONING

2. an opening challenge You are the marketing director of a loss-making brewery. You need to develop new products to revitalise the business but you do not have the resources to launch a full range. How will you choose what type of beer to sell and to whom?

3. agenda • market selection • market segmentation • targeting strategies • positioning

4. market attractiveness • market opportunity • competitive advantage • the objectives of the organisation

5. segmentation, targeting and positioning market segmentation targeting positioning

6. market segmentation and targeting: why do it? • many markets are demand-driven • consumers and customers are more demanding • few mass markets remain • markets are fragmenting

7. what is market segmentation? ‘the process of dividing a total market into subgroups (segments) such that each segment consists of buyers and users who share similar characteristics but are different from those in the other segments’ (Masterson and Pickton, 2014)

8. criteria for determining good market segments • measurable • homogeneous • heterogeneous • substantial • accessible • operational

9. consumer segmentation bases • demographic • socio-economic or social grading • geographic • geo-demographic • psychographic • mediagraphic • behavioural

10. life-stage segments (BRMB-TGI) • fledglings • flown the nest • nest builders • mid-life dependents • unconstrained couples • playschool parents • primary school parents • secondary school parents • hotel parents • senior sole decision makers • empty nesters • non-standard families • unclassified

11. examples of behavioural segmentation bases • purchase occasion • benefits sought • usage rate • user status • readiness stage • attitude to product • involvement • adopter type • loyalty status

12. using multiple segmentation variablesAQ – re-set figure type

13. organisational segmentation bases • macro-segmentation • geographic • type of organisation • industry grouping/business sector • customer size

14. organisational segmentation bases • micro-segmentation • user status • trade category • benefits sought • loyalty status • readiness stage • adopter type • purchasing practices • buy class

15. nested approach to B2B market segmentationAQ – re-set figure type

16. target marketing (targeting) ‘the selection of one or more market segments towards which marketing efforts can be directed’ (Masterson and Pickton, 2014, glossary)

17. targeting strategiesAQ – re-set figure type

18. evaluating a segment for targeting • sufficient current and potential sales/profits? • potential for sufficient future growth? • not over-competitive? • no excessive barriers to entry or exit? • unsatisfied needs that the company can serve well?

19. positioning ‘the place a brand is perceived to occupy in the minds of the target market relative to other competing brands’ (Masterson and Pickton, 2010: 148)

20. multi-attribute mappingAQ – re-set figure type

21. perceptual mappingAQ – re-set figure type

22. positioning strategies • attributes/product features • price/quality • usage occasions • benefits or needs • user • competitive • against another brand • a different product class

23. re-positioning e.g. McDonalds have been trying to move to a healthier position in people’s perceptions (photo courtesy of Dave Pickton)

24. five-stage process identify the total market identify market segments select target market segment(s) establish competitors’ positions establish own position

25. summary • markets are people, not products • products should be targeted at specific market groups (segments) • use multi-variable segmentation • opportunities for differentiation • develop clear positioning

26. reference Masterson, R. and Pickton, D. (2014) Marketing: An Introduction, 3rdedn. London: SAGE.