BUS Marketing 3

Marketing
FH-Prof. Dr. Martin K.J. Waiguny

4. Segmenting – Targeting - Positioning
What are markets?
Markets
Ø An aggregate of people who, as individuals or within organizations, have a need for certain products and the
ability, willingness and authority to purchase such product
Requirements for a market

Ø For a group of people to be a market, the members of the group must meet the following four requirements:
- They must need or want a particular product or service.
- They must have the ability to purchase the product or service. Ability to purchase is related to buying power,
which consists of resources such as money, goods and services that can be traded in an exchange situation.
- They must be willing to use their buying power.
- They must have the authority to buy the specific products or services.
Dibb et al. 2019

What are markets?
Types of market
ØConsumer markets
- Purchasers or individuals in their households who personally consume or benefit
from the purchased products and do not buy products primarily to make a profit
ØBusiness market
- Individuals or groups that purchase a specific kind of product to resell, use directly in
producing other products or use in general daily operations
Dibb et al. 2019

What is market segmentation?
Undifferentiated (or total market) approach

Ø An approach which assumes that all customers have similar needs and wants, and can be served with a single
marketing mix
Market segment
Ø A group of individuals, groups or organizations sharing one or more similar characteristics that cause them to
have relatively similar product needs and buying characteristics
Ø Defining Market Segmentation
- Heterogeneous markets
- Markets in which all customers have different requirements
- Market segmentation
- The process of grouping customers in markets with some heterogeneity into smaller, more similar or homogeneous segments. The
identification of target customer groups in which customers are aggregated into groups with similar requirements and buying
characteristics
Dibb et al. 2019

What is market segmentation?
Dibb et al. 2019

Segmenting, targeting and positioning
There are three stages to

carrying out market
segmentation: segmentation,
targeting and positioning.
Figure 7.3 gives an overview

of these stages.
Dibb et al. 2019

Hollensen 2015 8
Segmenting, targeting and positioning
ØSegmentation variables
- The dimensions or characteristics of individuals, groups or businesses that are used
for dividing a total market into segments
ØSelecting appropriate variables

- Single variable segmentation
- Segmentation achieved by using one variable, the simplest type of segmentation to
perform
- Multivariable segmentation
- Segmentation using more than one characteristic to divide a total market
Dibb et al. 2019

Segmentation variables: Multivariate
Dibb et al. 2019

Segmentation variables
Dibb et al. 2019

Segmentation effectiveness
Measurable
Ø easy to identify and measure; some basis must be found for effectively separating individuals into groups or segments with relatively
homogeneous product or service needs substantial – large enough to be sufficiently profitable to justify developing and maintaining a specific
marketing mix
Accessible
Ø easy to reach with the marketing mix developed – for example, the promotional effort should target the relevant consumers
Stable
Ø the question of segment stability over time is not often addressed; if companies are to make strategic decisions on the basis of revealed
segments, they need to be reasonably certain that those segments will be around long enough for action to be taken
Useful
Ø the selected segments must be meaningful to the managers tasked with operationalizing them and be likely to enable the company to better
satisfy its target market.
Segmentation variables: From Segment to Persona
Segmentation variables
continued
What is a Persona
§ A (stereo)prototypic description of a segment individual they need to be

- Clearly distinct (e.g. gen Z is no Persona)
- Must be reachable
- Must be describeable
èForensic Profile
16
Steps to get Personas
§ Step One: Segmentation and Data Collation

- Observations
- Interviews (qualitative data)
- Behavioural Data
- Etc.
§ Step Two: Idenfication of variables which allow to distinghuish between personas
- Demographics
- Lifestyle
- Values
- Living Conditions (Location)
- Etc.
§ Step 3: Reduction to Prototype
- Fotos
- Insights: Motives, Goals, Frustrations – as deep as possible
- Buying and Media Behaviour
- Contact points
- Etc.
https://www.semrush.com/persona/
17
Segmentation targeting strategies
Segmentation targeting is the decision about which market segment(s) an

organization decides to prioritize for its sales and marketing efforts
ØUndifferentiated strategy
- When a company targets an entire market for a product with a single marketing mix
ØConcentrated strategy
- A process by which an organization directs its marketing effort towards a single
market segment through one marketing mix
ØDifferentiated strategy
- A strategy by which an organization directs its marketing efforts towards two or
more market segments by developing a marketing mix for each
Dibb et al. 2019

Dibb et al. 2019

Target market attractiveness and opportunity
selection
Dibb et al. 2019

Evaluating markets and forecasting sales
ØSales potential
- The amount of sales possible for a particular brand or product in the context of
market conditions in a specific period of time
ØMarket share
- The company’s brand or product share of total sales in a particular target market
or market segment, versus competing brands
ØValue share
- The proportion of total market monetary sales attracted by an individual brand or
product within a particular market
Positioning
ØPositioning is the process of creating an image for a product in the minds of

target customers
ØDetermining a positioning
- Perceptual mapping is a tool used to visually depict consumer perceptions and
prioritising of brands and their perceived attributes
Positioning
ØSteps in determining a positioning plan

- Define the segments in a particular market.
- Decide which segment(s) to target.
- Understand what the target segment’s consumers or business customers expect and believe
to be the most important considerations when deciding on the purchase.
- Develop a product or products catering specifically for these needs and expectations.
- Evaluate the positioning and images, as perceived by the target customers, of competing
products in the selected market segment or segments.
- Select an image that sets the product or products apart from the competing products, thus
ensuring that the chosen image matches the aspirations of the target customers.
Positioning
Dibb et al. 2019

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Marketing

FH-Prof. Dr. Martin K.J. Waiguny

Requirements for a market

Dibb et al. 2019

Dibb et al. 2019

Undifferentiated (or total market) approach

Dibb et al. 2019

Dibb et al. 2019

There are three stages to

Figure 7.3 gives an overview

Dibb et al. 2019

ØSelecting appropriate variables

Dibb et al. 2019

Dibb et al. 2019

Dibb et al. 2019

§ A (stereo)prototypic description of a segment individual they need to be

§ Step One: Segmentation and Data Collation

Segmentation targeting is the decision about which market segment(s) an

Dibb et al. 2019

Dibb et al. 2019

Dibb et al. 2019

ØPositioning is the process of creating an image for a product in the minds of

ØSteps in determining a positioning plan

Dibb et al. 2019

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