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ONLINE MARKT 351 A. LEBARD C-8

SEGMENTATION, TARGETING AND POSITIONING

I. MARKET SEGMENTATION ANALYSIS A. Overview

1. Segmentation – dividing a market into distinct groups with distinct needs, characteristics, or behaviors who might merit separate products or marketing mixes (the process of dividing a market into meaningful, relatively similar, and identifiable segments or groups)

2. Targeting – the process of evaluating each market segment’s attractiveness and selecting one or more segments to enter

3. Positioning – arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers (developing a specific marketing mix to influence potential customers’ overall perception of a brand, product line, or organization in general)

B. Segmentation Analysis – Format 1. Segmentation a. Identify bases for segmenting the market b. Develop profiles of resulting segments 2. Targeting a. Develop measures of segment attractiveness b. Select the target market (s) 3. Positioning a. Develop positioning for each target market b. Develop a marketing mix for each target market Review #1

C. Segmentation Considerations 1. Segmentation Process – aggregating to achieve division a. Begin with unique individuals b. Group by homogeneous sets of dimensions c. Cost

1) Prompts a better understanding of the market 2) Some do not fit

d. Aggregating should continue as long as one mix will satisfy the segment and make the desired profit

e. Market gridding – a segmentation tool 1) Lose detail 2) Power Lawnmower Grid Two Dimensional Grid

Power Lawnmower lm lm lm lm lm lm lm lm lm lm Economy lm lm lm lm lm lm lm lm lm lm Y X Performance Review #2

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2. Bases of Segmentation Qualifying Dimensions

a. Geographic Segmentation – dividing a market into different geographical entities 1) Nations, states, regions, counties, cities, neighborhoods, ZIP codes, etc. 2) Based on the notion that consumer needs or responses vary geographically

b. Demographic Segmentation – dividing a market into different groups based on demographic variables

1) Age, gender, family size, family life-cycle (Exhibit 8.1, p. 133), income, occupation, education, religion, race, generation, and nationality

2) Most popular bases for segmentation Determining Dimensions

a. Psychographic Segmentation – dividing a market into different groups based on social class, lifestyle, or personality characteristics (market segmentation on the basis of personality, motives, lifestyles, and geodemographics [see Qualifying Dimensions] categories)

1) Personality a) Self-Image and Self-concept b) Some question of predictive value 2) Social Class – strong influence on preference (see Consumer Behavior notes) 3) Motives a) Emotional b) Rational 4) Lifestyle a) Activities, interests and opinions (AIO) b) Predictive tool – Snow Boarders

b. Behavioral Segmentation (Benefit) – dividing a market into different groups based on consumer knowledge, attitude, use, or response to a product 1) Best starting point for effective segmentation 2) Common behavioral segmentation

a) Occasion b) Benefit sought c) User status d) Usage rate e) Loyalty status

Review #3 3. Multivariable Segmentation a. Unlimited b. Aided by data-mining and math models 4. Criteria for Successful Segmentation a. Substantiality b. Identifiable and measurable c. Accessibility Intermission II. TARGETING A. Strategies 1. Undifferentiated 2. Differentiated (Multisegment) 3. Concentrated 4. Combined

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5. Disaggregation a. Individual b. Micromarketing c. Local

B. Target Selection Criteria 1. Size (Substantiality) 2. Identifiability and measurability 3. Reachability (Accessibility) 4. Responsiveness Review #4 III. POSITIONING A. Strategies 1. Product Position – the way the product is defined by consumers based on important attributes 2. Perceptual Ladder a. Rank based on value sets b. Auto rental companies

Hertz 1 Avis 2 National 3

3. Positioning Map a. A diagram of how consumers in a segment perceive brands based on specific elements they consider important b. Snack foods

MORE CONVENIENT •Raisins •Snack crackers •Cookies •Apples •Peanut butter sandwich •Potato/corn chips LESS MORE NUTRITIOUS NUTRITIOUS •Milk •Oranges •Candy •Ice Cream

LESS CONVENIENT

C. Bases for Positioning 1. Criteria for Positioning a. Attribute b. Price and quality c. Use or application d. Product user e. Product class f. Competitor g. Emotion

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Review #5 2. Choosing the Right Competitive Advantage a. Important b. Distinctive c. Superior d. Communicable e. Preemptive f. Affordable g. Profitable 3. Value proposition – the full mix of benefits on which positioned Review #6 IV. DEFINING A MARKET – Establishing the portion of the total population which makes up the market for a defined

market offer A. Potential Market – the set of consumers who profess some level of interest in a defined market offer B. Mass Market – the set of consumers who profess some level of interest in and have the requisite income to a defined market offer C. Available Market – the set of consumers with the interest, requisite income and access to a defined market offer D. Qualified Available Market – the set of consumers with the interest, requisite income, access and qualifications for a defined market offer END OF PODCAST Review #1 Each of the three major components of the Segmentation Analysis Format has how many subsections? 2) 3) 4) 6) Review #2 Aggregating to achieve division in the Segmentation Process should continue as long as 1) All individuals fit the segments 2) The product category is acceptable to all individuals 3) One mix will satisfy the segment and make the desired profit 4).The analyst feels comfortable Review #3 Psychographic Segmentation includes which of the following categories? 1) Personality 2) Social Class 3) Motives 4) Lifestyle 5) All of the above Intermission Review #4 Which of the following companies, cited in the Podcast, uses a Differentiated (Multisegment) targeting strategy? 1) Albertsons 2) BMW 3) Procter & Gamble 4) Walmart Review #5 Describing a Product Position based on competitive rank using various value sets best describes a? 1. Perceptual Ladder 2. Positioning Map 3. Positioning Scale 4. Positioning Value

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Review #6 The full mix of benefits on which a product is positioned best describes? 1. Positioning Ladder 2. Value proposition 3. Value Scale 4. Positioning Value END