Market Segmentation, Targeting,

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Chapter 9

• Market Segmentation, Targeting,
• and Positioning

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Streamline, Inc.

• Boston based company provides online shopping for
  2 career couples with income over 60,000, 25-45
  years old, and the home must have a garage or
  basement.

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Quaker State

• Markets a 4X4 motor oil for SUVs, light
  trucks, and minivans.
• Why the special name 4X4?
• People didnt understand the difference between
  5W30 and 10W30 oil.

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We already know this stuff

• Marketing discovers and satisfies needs and
  wants.
• Requirements of marketing
• Two or more parties
• Desire ability to satisfy needs
• Communication
• Exchange
• Types of markets
• Consumer (individuals)
• Organizational (B2B)

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What is market segmentation?

• Separating the total market into groups that
• (1) have Common needs and
• (2) will respond in much the same way to
  marketing techniques.

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Why is it important?

• Not all buyers are alike.
• Marketers can respond more effectively to smaller
  groups with similar needs wants.
• We can harvest previously untapped markets.
• Potential to increase profits.

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When to segment a market

• One product and multiple market segments
• Multiple products and multiple market segments
• Mass customization

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Steps to segment a market

• Form prospective buyer into groups
• Form product lines into groups
• Determine the size of the market
• Select the target market
• Take action to reach the target market

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Step 1

• Determine criteria for segmenting
• Ways to segment
• Geographic
• Demographic
• Psychographics
• Buying situations
• Usage rates

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Step 2

• If we sell only one product, we will most likely
  use a homogeneous strategy.
• If we sell a number of products, we will most
  likely use a differentiation strategy.

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Step 3

• Estimate the size of your markets
• Use primary and secondary data
• Estimate sales revenues for each market

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Step 4

• Select the market based on
• Size
• Growth potential
• Competitive position
• Marketing costs
• Compatibility with objectives

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Step 5

• Take the marketing action
• Products offered
• Pricing
• Promotion
• Placement

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Product positioning

• Trying to create and maintain your intended
  product concept in the customers mind.
• In the mind of the consumer, where does our
  product stand in comparison to the competition?
• It is the result of the customers perception of
  a products attributes.

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Types of positioning

• Head-to-head
• Similar product attributes
• Same target market
• Differentiation
• Less competition
• Smaller market

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Perceptual maps

• What are the important attributes of the product?
• How do people feel about existing products with
  those attributes?
• What are the ideal attributes?

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Questions?