Steps in Market Segmentation,

Targeting,and Positioning
Market Market Market
Segmentation Targeting Positioning
1. Identify 3. Evaluate 5. Identify
segmentation attractiveness possible
positioning
variables and of each concepts for
segment the segment each target
market segment
4. Select the
2. Develop target 6. Select,
profiles of segment(s) develop, and
communicate
resulting the chosen
segments positioning
concept
 Basic Market-Preference
Patterns
(a) Homogeneous (b) Diffused (c) Clustered
preferences preferences preferences
Creaminess

Creaminess

Creaminess
Sweetness Sweetness Sweetness
 Market-Segmentation
Procedure
❶ Survey
– Motivations
– Attitudes
– Behavior
❷ Analysis
– Factors
– Clusters
❸ Profiling
 Bases for Segmenting
Consumer Markets
Geographic
Region, City or Metro
Size, Density, Climate Demographic
Age, Gender, Family size
and Fife 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
• Size, purchasing power,
Measurable profiles of segments can
be measured.

• Segments must be large or

Substantial profitable enough to serve.

• Segments can be
Accessible effectively reached and
served.

• Segments must respond

differently to
Differential different marketing mix
elements & actions.

• Must be able to attract and

Actionable serve
the segments.
 Heavy and Light Users of Common
Consumer Products
PRODUCT (% USERS) HEAVY HALF LIGHT HALF
Soups and
detergents (94%) 75% 25%
Toilet tissue (95%) 71% 29%
Shampoo (94%) 79% 21%
Paper towels (90%) 75% 25%
Cake mix (74%) 83% 17%
Cola (67%) 83% 17%
Beer (41%) 87% 13%
Dog food (30%) 81% 19%
Bourbon (20%) 95% 5%
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 Selective Product
concentration specialization specialization
M1 M2 M3 M1 M2 M3 M1 M2 M3
P1 P1 P1
P2 P2 P2
P3 P3 P3
Market Full market
specialization coverage
M1 M2 M3 M1 M2 M3
P1 P1
P = Product
M = Market P2 P2
P3 P3
 Segment-by-Segment
Invasion Plan
Customer Groups
Airlines Railroads Truckers
Product Varieties

Large
computers

Mid-size
computers

Personal
computers

Company A Company B Company C

 Review
• Identifying Market Segments
• Choosing Target Markets