CB158 Chapter 4 PPT 2022

CB158
CHAPTER 4
Segmenting, Targeting, and
Positioning
Chapter 4 Learning Outcomes
Discuss markets, market segments and the importance of
market segmentation
Describe the bases commonly used to segment
consumer and business markets
Discuss the criteria for successful market segmentation
Chapter 4 Learning Outcomes
List the steps involved in segmenting markets
Discuss the alternative strategies for selecting target
markets
Explain how and why companies implement positioning
strategies and how product differentiation plays a role
What is a market?
Consists of people or organizations
People have similar wants and needs that can be satisfied with a
product
People have a willingness and ability to buy
People are willing to exchange their resources (usually money) for

the product
Market segments exist within markets
Subgroups of people sharing similar

characteristics and needs
It’s important to segment your market
DIVIDING A MARKET MEANINGFUL, TAILOR YOUR

INTO SMALLER SIMILAR, MARKETING MIX TO
SEGMENTS IDENTIFIABLE EACH SEGMENT
SEGMENTS
Identify groups of customers with similar
needs
Information to design appropriate Market

marketing mixes is uncovered Segmentation
plays a key
More accuracy in defining marketing role in
objectives and allocating resources marketing
Consistent with the marketing concept

How do you segment a market?
Marketers use different segmentation bases or variables to divide
a market
Can use more than one segmentation variable
Increasing use of multivariable segmentation
Market research can assist a marketer when segmenting

Common Segmentation Variables
Geographic Demographic Psychographic Benefit

Segmentation Segmentation Segmentation Segmentation
Knowledge Check
Canada Goose is a successful Canadian company that
uses climate as a means of segmenting its market. It
also gains a much more robust understanding of its
target market by considering:
A. Demographics
B. Income
C. Occupation
D. Psychographics
Geographic Segmentation
Region of Region of
Market size
the world the country
Market
Climate
density
Demographic Segmentation
Age Gender Income
Ethnic Family Life

Occupation
Background Cycle
FAMILY LIFE CYCLE
Psychographic Segmentation
Personality
Motives
Lifestyles
Geodemographic
Benefit Segmentation
Grouping consumers based on:
The benefits they seek from a product
Consumer needs and wants

Usage-Rate Segmentation
Grouping consumers based on:
The amount bought or consumed

(first time users, light, medium, heavy)
Pareto Principle (80/20 Rule)

Segmenting Business Markets
Company
Buying Processes Characteristics
Purchase criteria Geographic location

Purchasing strategies Type and size of company
• Satisfiers Product use
• Optimizers Type of customer
Buyer’s personal Usage rate
characteristics Buying organization’s
structure
How product is used
Criteria for Effective Segmentation
Substantiality Identifiable
Large enough to support
Identifiable and
a separate marketing
measurable
mix
Accessibility
Responsiveness
Ability to reach target
group with separate Market respond is logical
marketing mix
Knowledge Check
A new retail store opens in downtown Halifax and targets new moms by
offering not just baby clothing and accessories, but also comfortable,
fashion-forward, and good-quality clothing for moms. In addition, a child-
minding room is available for short periods so the mom can shop with
comfort and little stress. This store shows signs of continued success;
they fully understand their target, and the target is:
A. Accessible
B. Identifiable and measurable
C. Substantial in size
D. Responsive to their full marketing mix
E. All of the above
Steps in Segmenting a Market
Strategies for Selecting Target Markets
Target market
A group of people or organizations for which an
organization designs, implements, and maintains
a marketing mix
Meet the needs of that group
Mutually satisfying exchanges
Strategies for Selecting Target
Markets
Undifferentiated Concentrated Multi-segment One-to-one

• Mass-market • A market niche • Two or more • Sell more
philosophy to target— segments products to
• One marketing single segment • With a distinct single customer
mix for the • Highly marketing mix • Loyalty and
entire market specialized for each retention
marketing mix
Copyright © 2022 by Cengage Canada.

Targeting Advantages Disadvantages
Strategy
Undifferentiated Potential savings on production/marketing costs Unimaginative product
targeting offerings
Company more susceptible to
competition
Concentrated Concentrates resources Segments too small or

targeting Can better meet the needs of a narrowly defined changing
segment Large competitors may more
Allows some small companies to better compete with effectively market to niche
larger companies segment
Provides strong positioning
Multisegment Greater financial success High costs

targeting Economies of scale in producing/marketing Cannibalization
One-to-One Delivers highly customized service High costs

targeting High customer engagement/retention
Increasing revenue through loyalty
Growth in One-to-one will continue
Personalization Time Savings

Consumers are individuals Less time to shop and
with different wants and make purchase
needs decisions
Technology Loyalty
Availability of data rich Company loyalty will
consumer information lead to consumer
loyalty
Positioning
Position: The place the product, brand, or service occupies in
the consumer’s mind relative to competition
Effective positioning requires:

Assessing the positions Determining the important Choosing a position in the market
where the organization’s
occupied by competing dimensions underlying marketing efforts will have the
products these positions greatest impact
Strive for Product Differentiation
Positioning based on what

distinguishes your product
from the competition
What makes you different? Better? Why would the
consumer choose you over your competition?
Perceptual Mapping
Consumer research. What’s in the consumers mind?
Visual display of competitive positioning
Based on two dimensions that you choose to analyze
Can be any two dimensions
Two dimensions that are important characteristics of the market
Can analyze many perceptual maps to gain understanding

Perceptual Map
for Soft Drinks
Based on two dimensions
Sweetness and Degree of Fun

Examples of Common Dimensions for Perceptual Maps
DIMENSION EXPLANATION
Attribute A product feature, a product benefit
Price and quality High price as a symbol of quality
Use or application Stress uses or applications
Product user Focus is on a personality type
Product class Associated with a particular category of products
Competitor Against competition
Emotion How the product makes you feel

You can change your product positioning
Changing the
consumer’s perception
of your brand versus
competition
Not easy to change your

Repositioning positioning in the
consumer’s mind
Can be done successfully

Targeted consumers
Developing a
Frame of reference
Positioning
Statement Point of difference
Reason to believe
Knowledge Check
There is a variety of bases/dimensions upon which a company can position its
products. In 2020, at the height of the COVID-19 pandemic, Subaru launched an
ad that featured images of front-line workers in healthcare and food production
that recognizes and thanks them for keeping Canada safe and fed. This ad
reinforces Subaru’s positioning on safety but also uses ________ as a base(s) to
capture our hearts and minds.
A. Price and quality

B. Use or application
C. Emotion
D. Product class

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CB158

People are willing to exchange their resources (usually money) for

Subgroups of people sharing similar

DIVIDING A MARKET MEANINGFUL, TAILOR YOUR

Information to design appropriate Market

Consistent with the marketing concept

Increasing use of multivariable segmentation

Market research can assist a marketer when segmenting

Geographic Demographic Psychographic Benefit

Age Gender Income

Ethnic Family Life

The benefits they seek from a product

Consumer needs and wants

The amount bought or consumed

Pareto Principle (80/20 Rule)

Purchase criteria Geographic location

Undifferentiated Concentrated Multi-segment One-to-one

Copyright © 2022 by Cengage Canada.

Concentrated Concentrates resources Segments too small or

Multisegment Greater financial success High costs

One-to-One Delivers highly customized service High costs

Personalization Time Savings

Effective positioning requires:

Positioning based on what

Visual display of competitive positioning

Based on two dimensions that you choose to analyze

Can be any two dimensions

Two dimensions that are important characteristics of the market

Can analyze many perceptual maps to gain understanding

Based on two dimensions

Sweetness and Degree of Fun

Attribute A product feature, a product benefit

Price and quality High price as a symbol of quality

Use or application Stress uses or applications

Product user Focus is on a personality type

Product class Associated with a particular category of products

Competitor Against competition

Emotion How the product makes you feel

Not easy to change your

Can be done successfully

A. Price and quality

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