MARKETING MANAGEMENT

8
Identifying Market
Segments and
Targets

Kotler

Keller

Effective Targeting Requires

Identify and profile distinct groups of
buyers who differ in their needs and
preferences.
Select one or more market segments to
enter.
Establish and communicate the distinctive
benefits of the market offering.

CHP: 8&10-2

Fords Model T Followed a Mass

Market Approach

CHP: 8&10-3

Steps in Market Segmentation,

Targeting, and Positioning
Market
Market Segmentation
Segmentation

1.
1.Identify
Identifybases
basesfor
for
segmenting
segmentingthe
the
market
market
2.
2.Develop
Developsegment
segment
Market
profiles
Market Targeting
Targeting
profiles
3.
3.Develop
Developmeasure
measureof
of
segment
segmentattractiveness
attractiveness
4.
4.Select
Selecttarget
targetsegments
segments

Market
Market positioning
positioning

5.
5.Develop
Developpositioning
positioning
for
for
target
targetsegments
segments
6.
6.Develop
Developaa
CHP: 8&10-4
marketing

Four levels of Micromarketing

Segments

Niches

Local areas

Individuals

CHP: 8&10-5

Segment Marketing

Targeting a group of customers

who share a similar set of
needs and wants.

CHP: 8&10-6

Figure 8.1 Basic Market Preference Patterns

CHP: 8&10-7

Customerization

Combines operationally driven

mass customization with customized
marketing in a way that empowers
consumers to design the
product and service offering
of their choice.

CHP: 8&10-8

Figure 8.2 Examples of Market

Customization

CHP: 8&10-9

Segmenting Consumer Markets

Geographic
Geographic
Demographic
Demographic
Psychographic
Psychographic
Behavioral
Behavioral

CHP: 8&10-10

Demographic Segmentation
Age
Age and
and Life
Life Cycle
Cycle
Life
Life Stage
Stage
Gender
Gender
Income
Income
Generation
Generation
Social
Social Class
Class
CHP: 8&10-11

Psychographic
Segmentation:
The VALS
Segmentation
System

CHP: 8&10-12

Behavioral Segmentation
Decision Roles
Initiator
Influencer
Decider
Buyer
User

Behavioral Variables
Occasions
Benefits
User Status
Usage Rate
Buyer-Readiness
Loyalty Status
Attitude
CHP: 8&10-13

Figure 8.5 Behavioral

Segmentation Breakdown

CHP: 8&10-14

Segmenting for Business Markets

Demographic
Demographic
Operating
Operating Variable
Variable
Purchasing
Purchasing Approaches
Approaches
Situational
Situational Factors
Factors
Personal
Personal
Characteristics
Characteristics
CHP: 8&10-15

Segmenting for Business Markets

Demographic segmentation
Industry, company size, location
Operating variables
Technology, usage status,
customer capabilities
Purchasing approaches
Situational factors
Urgency, specific application, size
of order
Personal characteristics
Buyer-seller similarity, attitudes
toward risk, loyalty

CHP: 8&10-16

Effective Segmentation
Criteria
Measurable
Measurable

Size, purchasing power,

Accessible
Accessible

profiles
of segments can be
measured.
Segments can be effectively
reached and served.

Substantial
Substantial

Segments are large or

Differential
Differential
Actionable
Actionable

profitable enough to serve.

Segments must respond

differently to different
marketing mix elements &
programs.
Effective programs can be
designed to attract and serve
the segments.
CHP: 8&10-17

Market Targeting
Evaluating Market Segments
Segment Size and Growth
Analyze current sales, growth rates and expected
profitability for various segments.
Segment Structural Attractiveness
Consider effects of: competitors, availability of
substitute products and, the power of buyers &
suppliers.
Company Objectives and Resources
Company skills & resources needed to succeed in
that segment(s).
Look for Competitive Advantages.
CHP: 8&10-18

Market Targeting
Market Coverage Strategies
Company
Company
Marketing
Marketing
Mix
Mix

Market
Market

A. Undifferentiated Marketing

Company
Company
Marketing
MarketingMix
Mix11
Company
Company
Marketing
MarketingMix
Mix22
Company
Company
Marketing
MarketingMix
Mix33

Segment
Segment11
Segment
Segment22
Segment
Segment33

B. Differentiated Marketing

Company
Company
Marketing
Marketing
Mix
Mix
C. Concentrated Marketing

Segment
Segment11
Segment
Segment22
Segment
Segment33
CHP: 8&10-19

Figure 8.6 Patterns of Target Market

Selection

CHP: 8&10-20

Figure 8.6 Patterns of Target Market

Selection

CHP: 8&10-21

Figure 8.6 Patterns of Target Market

Selection

CHP: 8&10-22

MARKETING MANAGEMENT
12th edition

10
Crafting the Brand
Positioning

Kotler

Keller

Marketing Strategy
Segmentation
Segmentation
Targeting
Targeting
Positioning
Positioning

CHP: 8&10-24

Positioning

Act of designing the companys

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

CHP: 8&10-25

Choosing a Positioning
Strategy
Step 1. Identifying
Possible
Competitive
Advantages
Step 2. Selecting
the Right
Competitive
Advantage

Step 3.
Communicating and
Delivering the
Chosen Position
CHP: 8&10-26

Defining Associations
Points-of-parity
Points-of-difference
(PODs)
(POPs)
Attributes or benefits
Associations that are
consumers strongly
not necessarily unique
associate with a brand,
to the brand but may
positively evaluate, and
be shared with other
believe they could not
brands
find to the same extent
with a competitive
brand
CHP: 8&10-27

Consumer Desirability Criteria for

PODs
Relevance
Relevance
Distinctiveness
Distinctiveness
Believability
Believability

CHP: 8&10-28

Deliverability Criteria for PODs

Feasibility
Feasibility
Communicability
Communicability
Sustainability
Sustainability

CHP: 8&10-29

Examples of Negatively Correlated

Attributes and Benefits
Low-price vs. High
quality
Taste vs. Low
calories
Nutritious vs. Good
tasting
Efficacious vs. Mild

Powerful vs. Safe

Strong vs. Refined
Ubiquitous vs.
Exclusive
Varied vs. Simple

CHP: 8&10-30

Developing and Communicating a

Positioning Strategy

Positioning: How many ideas to

promote?
Unique selling proposition

Four major positioning errors

1.
2.
3.
4.

Underpositioning
Overpositioning
Confused positioning
Doubtful positioning
CHP: 8&10-31

Differentiation Strategies

Product

Personnel

Channel

Image

CHP: 8&10-32

Product Differentiation

Product form
Features
Performance
Conformance
Durability
Reliability
Reparability

Style
Design
Ordering ease
Delivery
Installation
Customer training
Customer consulting
Maintenance

CHP: 8&10-33

Identity and Image

Identity:
The way a
company aims to
identify or
position itself

Image:
The way the
public perceives
the company or its
products
CHP: 8&10-34