Topic Six: Identifying customer values

Objectives
Identifying Market Segments
Choosing Target Markets
Positioning for competitive advantages

Steps in Market Segmentation, Targeting,and

Positioning
Market
Segmentation
1. Identify
segmentation
variables and
segment the
market
2. Develop
profiles of
resulting
segments

Market
Targeting
3. Evaluate
attractiveness
of each
segment
4. Select the
target
segment(s)

Market
Positioning
5. Identify
possible
positioning
concepts for
each target
segment
6. Select,
develop, and
communicate
the chosen
positioning
concept

Basic Market-Preference Patterns

Sweetness

(c) Clustered
preferences

Creaminess

(b) Diffused
preferences

Creaminess

Creaminess

(a) Homogeneous
preferences

Sweetness

Sweetness

Market-Segmentation Procedure
Survey

Motivations
Attitudes
Behavior

Analysis

Factors
Clusters

Profiling

Bases for Segmenting Consumer

Markets
Geographic
Region, City or Metro
Size, Density, Climate

Demographic
Age, Gender, Family size
and Life cycle, Race,
Occupation, or Income ...

Psychographic
Lifestyle or Personality
Behavioral
Occasions, Benefits,
Uses, or Attitudes

Bases for Segmenting Business

Markets

Demographic
Operating Variables
Purchasing Approaches
Situational Factors
Personal Characteristics

Effective Segmentation
Measurable

Size, purchasing power,

profiles of segments can
be measured.

Substantial

Segments must be large or

profitable enough to serve.

Accessible

Segments can be
effectively reached and
served.

Differential

Segments must respond

differently to different
marketing mix elements &
actions.

Actionable

Must be able to attract and

serve the segments.

Additional Segmentation Criteria

Ethical Choice of Market Targets

Segment Interrelationships & Supersegments
Segment-by-Segment Invasion Plans
Intersegment Cooperation

Five Patterns of Target Market Selection

Single-segment
concentration

Selective
specialization

M1 M2 M3

M1 M2 M3

P1

P1

P2

P2

P3

P3

Product
specialization
M1 M2 M3
P1
P2
P3

Market
specialization

Full market
coverage

M1 M2 M3
P = Product
M = Market

M1 M2 M3

P1

P1

P2

P2

P3

P3

Segment-by-Segment
Invasion Plan
Customer Groups
Product Varieties

Airlines

Railroads

Truckers

Large
computers

Mid-size
computers

Personal
computers
Company A

Company B

Company C

Product Differentiation

Form

Durability

Features

Reliability

Performance

Repairability

ConformQuality
ance
Quality

Style

Design

Services Differentiation

Installation

Customer
Consulting

Delivery

Customer
Training

Maintenance
& Repair

Miscellaneous
Services

Ordering
Ease

Image Differentiation
Media

Atmosphere

Symbols

Events

Important

Profitable

Distinctive

Differences Worth
Establishing
Affordable

Superior

Preemptive

Positioning is the act of

designing the companys

offering and image to occupy a
distinctive place in the the
target markets mind.

Perceptual Map
Live shows
Easy to reach
Good food
Fantasy
Exercise
Fun rides
Disneyland

Knotts
Berry
Farm

-1.6 -1.4 -1.2 -1.0 -0.8 -0.6 -0.4 -0.2

-0.2

Magic
Mountain

1.0

Little waiting
0.8

Educational,
animals
Marineland
0.4
of the
Japanese
Pacific
0.2 Deer Park
0.6

0.2

0.4

0.6 0.8 1.0 1.2 1.4 1.6

-0.4
-0.6
-0.8

Busch
Gardens
Economical

Lion
Country
Safari