Consumer Behavior, Market Segmentation & Positioning

Material in slides 2-9 of this overview adapted from Principles of Marketing. (2015). University of Minnesota Libraries Press.

https://open.lib.umn.edu/principlesmarketing/

Market Segmentation, Targeting & Positioning

Figuring out who are your customers

❖Targeted marketing versus mass marketing ❖How are markets segmented ❖ Selecting target markets and target-market strategies

❖Positioning and repositioning offerings

Targeted marketing versus mass marketing

Mass marketing = undifferentiated marketing

• shotgun approach to all consumers without any consideration of their unique characteristics

• not many mass marketed products

Targeted marketing = differentiated marketing

• finding groups of like customers to serve that will be most receptive to product or service offering

• can be more efficient and effective use of resources

❖ Retaining customers is still easier than finding and attracting new customers

❖ Targeting ‘best’ customers is job one. Find more of them is a market penetration growth strategy

❖ May also need to find new market segments for growth or a market development growth strategy

How markets are segmented

General categories of segmentation bases

• Behavioral segmentation

• Demographic segmentation

• Geographic segmentation

• Psychographic segmentation

Common segmentation bases

Selecting target markets & target-market strategies

A target market must be:

ü Sizable

ü Growing

ü Not swamped with competitors

ü Accessible or you can reach them in some manner

ü A good fit with company’s objectives and mission

ü Company has resources to compete

Not every market segment includes variables from all bases or even all criteria within each base.

Example of a market segment for the TV show, Blackish

Ø Behavior

Ø Like to watch TV as a family unit

Ø Demographic

Ø 18-40 years old, lives with a family, African American, white collar wage earner in family, at least high school diploma or higher, medium household income of $50,000

Ø Geography

Ø Lives in urban/suburban population centers of cities of at least 1 million

Ø Psychographics

Ø believes in American Dream, busy lifestyle with multiple sports & careers

Target market strategies — How many market segments should become target markets?

• Multisegment marketing

• Concentrated marketing

• niche marketing

• microtargeting

• Global markets

Positioning & repositioning offerings Positioning — tells the consumer why they should buy your product and competitive offerings

Perceptual map — tool used to graphically depict where competition’s positioning are located related to the company offering.

• Uncontested space — the blank space not occupied by anyone that still has the greatest potential based on the two variables used in the perceptual map

• If company’s position overlaps a competitor, may want to consider a repositioning strategy

Tagline — the marketing communications tool used to convey the positioning strategy

Questions?

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