1、Chapter 5 Market Segmentation, Targeting and Positioning,5.1 Market Segmentation,5.1.1 Using Market Segmentation Market segmentation aims to increase a companys precision marketing. In contrast, sellers that use mass marketing engage in the mass production, distribution, and promotion of one product
2、 for all buyers. This proliferation of media and distribution channels is making it difficult to practice “one size fits all” marketing. Some observers even claim that the mass marketing is dying. Therefore, to stay focused rather than scattering their marketing resources, more marketers are using m
3、arket segmentation. In this approach that falls midway between mass marketing and individual marketing, each segments buyers are assumed to be quite similar in wants and needs, yet no two buyers are really alike. To use this technique, a company must understand both the levels and the patterns of ma
4、rket segmentation.,5.1.2 Levels of Market Segmentation 1. Segment Marketing A market segment consists of a large identifiable group within a market, with similar wants, purchasing power, geographical location, buying attitudes, or buying habits. 2. Niche Marketing A niche is a more narrowly defined
5、group, typically a small market whose needs are not being well served. Marketers usually identify niches by dividing a segment into subsegments or by defining a group seeking a distinctive mix of benefits. In an attractive niche, customers have a distinct set of needs; they will pay a premium to the
6、 firm that best satisfies their needs; the niche is not likely to attract other competitors; the nicher gains certain economies through specialization; and the niche has size, profit, and growth potential. Whereas segments are fairly large and normally attract several competitors, niches are fairly
7、small and may attract only one or two rivals. Some larger firms have therefore turned to niche marketing.,3. Local Marketing Target marketing is leading to some marketing programs that are tailored to the needs and wants of local customer groups (trading areas, neighborhoods, even individual stores)
8、. Those favoring local marketing see national advertising as wasteful because it fails to address local needs. On the other hand, opponents argue that local marketing drives up manufacturing and marketing costs by reducing economies of scale. Moreover, logistical problems become magnified when compa
9、nies try to meet varying local requirements, and a brands overall image might be diluted if the product and message differ in different localities. 4. Individual Marketing The ultimate level of segmentation leads to “segments of one”, “customized marketing”, or “one-to-one marketing”. Although indiv
10、idual customers are taking more initiative in designing and buying products, marketers still need to influence the process in a variety of ways.,5.1.3 Patterns of Market Segmentation 1. Homogeneous Preferences Figure 5.1 shows a market in which all of the consumers have roughly the same preference,
11、so there are no natural segments. We predict that existing brands would be similar and cluster around the middle of the scale in both sweetness and creaminess. 2. Diffused Preferences At the other extreme, consumer preferences may be scattered throughout the space (see Figure 5.1), indicating great
12、variance in consumer preferences. One brand might position in the center to appeal to the most people; if several brands are in the market, they are likely to position throughout the space and show real differences to reflect consumer-preference differences. 3. Clustered Preferences The market might
13、 reveal distinct preference clusters, called natural market segments (see Figure 5.1). The first firm in this market might position in the center to appeal to all groups, choose the largest market segment (concentrated marketing), or develop several brands for different segments.,5.1.4 Market-Segmen
14、tation Procedure 1. Survey Stage The researcher conducts exploratory interviews and focus groups to gain insight into customer motivations, attitudes, and behavior. Then the researcher prepares a questionnaire and collects data on attributes and their importance ratings, brand awareness and brand ra
15、tings, product-usage patterns, attitudes toward the product category, and respondents demographics, geographics, psychographics, and media-graphics. 2. Analysis Stage The researcher applies factor analysis to the data to remove highly correlated variables, and then uses cluster analysis to create a
16、specified number of maximally different segments. 3. Profiling Stage Each cluster is profiled in terms of its distinguishing attitudes, behavior, demographics, psychographics, and media patterns, and then each segment is given a name based on its dominant characteristic.,5.1.5 Bases for Segmenting C
17、onsumer Market 1. Geographic Segmentation Geographic segmentation calls for dividing the market into different geographical units such as nations, states, regions, counties, cities, or neighborhoods. 2. Demographic Segmentation In demographic segmentation, the market is divided into groups on the ba
18、sis of age and the other variables. One reason is that the most popular consumer segmentation method depending on consumer wants, preferences, and usage rates are often associated with demographic variables. Another reason is that demographic variables are easier to measure. Even when the target mar
19、ket is described in non-demographic terms (say, a personality type), the link to the demographic characteristics is needed in order to estimate the size of the target market and the media that should be used to reach it efficiently.,3. Psychographic Segmentation In psychographic segmentation, buyers
20、 are divided into different groups on the basis of lifestyle or personality and values. People within the same demographic group can exhibit very different psychographic profiles. 4. Behavioral Segmentation In behavioral segmentation, buyers are divided into groups on the basis of their knowledge of
21、, attitude toward, use of, or response to a product. Many marketers believe that behavioral variables-occasions, benefits, user status, usage rate, loyalty status, buyer-readiness stage, and attitude-are the best starting points for constructing market segments. 5. Multi-Attribute Segmentation (Geo-
22、Clustering) Marketers are increasingly combining several variables in an effort to identify smaller, better defined target groups. Thus, a bank may not only identify a group of wealthy retired adults, but may distinguish several segments depending on current income, assets, savings, and risk prefere
23、nces within that group.,5.1.6 Bases for Segmenting Business Market The business market can be segmented with some variables that are employed in consumer market segmentation, such as geography, benefits sought, and usage rate. Yet business marketers can also use several other variables. The major se
24、gmentation variables for segmenting the business market as below: (1) Demographic: including industry, company size and location; (2) Operating variables: including technology, user or nonuser status and customer capabilities; (3) Purchasing approaches: including purchasing-function organization, po
25、wer structure, nature of existing relationships, general purchase policies and purchasing criteria; (4) Situational factors: including urgency, specific application, and size of order; (5) Personal characteristics: including buyer-seller similarity, attitudes toward risk and loyalty toward the suppl
26、ier. A company should first decide which industries it wants to serve. Then, within a chosen target industry, the company can further segment by company size, possibly setting up separate operations for selling to large and small customers.,5.1.7 Effective Segmentation 1. Measurable The size, purcha
27、sing power, and characteristics of the segments can be measured. 2. Substantial The segments are large and profitable enough to serve. A segment should be the largest possible homogeneous group worth going after with a tailored marketing program. 3. Accessible The segments can be effectively reached
28、 and served. 4. Differentiable The segments are conceptually distinguishable and respond differently to different marketing mixes. If two segments respond identically to a particular offer, they do not constitute separate segments. 5. Actionable Effective programs can be formulated for attracting an
29、d serving the segments.,5.2 Market Targeting,5.2.1 Evaluating Market Segments In evaluating different market segments, the firm must consider two factors: (1) the segments overall attractiveness, and (2) the companys objectives and resources. First, the firm must ask whether a potential segment has
30、the characteristics that make it generally attractive, such as size, growth, profitability, scale economies, and low risk. Second, the firm must consider whether investing in the segment makes sense in the firms given objectives and resources. Some attractive segments can be dismissed because they d
31、o not mesh with the companys long-run objectives; some should be dismissed if the company lacks one or more of the competences needed to offer superior value.,5.2.2 Selecting and Entering Market Segments 1. Single-Segment Concentration Many companies concentrate on a single segment. However, concent
32、rated marketing involves higher than normal risks if the segment turns sour because of changes in buying patterns or new competition. For these reasons, many companies prefer to operate in more than one segment. 2. Selective Specialization Here the firm selects a number of segments, each objectively
33、 attractive and appropriate. There may be little or no synergy among the segments, but each segment disperses the firms risk. 3. Product Specialization Another approach is to specialize in making a certain product for several segments. Through a product specialization strategy, the firm builds a str
34、ong reputation in the specific product area. The downside risk is that the product may be supplanted by an entirely new technology.,4. Market Specialization With market specialization, the firm concentrates on serving many needs of a particular customer group. However, the downside risk is that the
35、customer group may have its budgets cut. 5. Full Market Coverage Here a firm attempts to serve all customer groups with all of the products they might need. Only very large firms can undertake a full market coverage strategy. Large firms can cover a whole market in two broad ways: through undifferen
36、tiated marketing or differentiated marketing. In undifferentiated marketing, the firm ignores market-segment differences and goes after the whole market with one market offer. Focusing on a basic buyer need, it designs a product and a marketing program that will appeal to the broadest number of buye
37、rs. To reach the market, the firm uses mass distribution backed by mass advertising to create a superior product image in peoples minds.,In differentiated marketing, the firm operates in several market segments and designs different programs for each segment. Differentiated marketing typically creat
38、es more total sales than undifferentiated marketing does. However, the need for different products and marketing programs also increases the firms costs for product modification, manufacturing, administration, inventory, and promotion. Because differentiated marketing leads to both higher sales and
39、higher costs, we cannot generalize this strategys profitability. Still, companies should be cautious about over-segmenting their market. If this happens, they may want to use counter-segmentation to broaden their customer base. Smith Kline Beecham introduced Aquafresh toothpaste to attract three ben
40、efit segments simultaneously: those seeking fresh breath, whiter teeth, and cavity protection. Next, the company moved deeper into counter-segmentation by launching flavored toothpastes for children, toothpastes for people with sensitive teeth, and other toothpaste products.,5.2.3 Targeting Multiple
41、 Segments and Super-Segments Very often, companies start out by marketing to one segment, then expanding to others. In targeting more than one segment, a company should examine segment interrelationships on the cost, performance, and technology side. A company that is carrying fixed costs, such as a
42、 sales force or store outlets, can generally add products to absorb and share some of these costs. Smart companies know that economies of scope can be just as important as economies of scale. Moreover, companies should look beyond isolated segments to target a super-segment, a set of segments that s
43、hare some exploitable similarity Still, a companys invasion plans can be thwarted when it confronts blocked markets. This problem calls for mega-marketing, the strategic coordination of economic, psychological, political, and public-relations skills to gain the cooperation of a number of parties in
44、order to enter or operate in a given market.,5.2.4 Ethical Choice of Market Targets Market targeting sometimes generates public controversy. The public is concerned when marketers take unfair advantage of vulnerable groups (such as children) or disadvantaged groups (such as inner-city poor people),
45、or promote potentially harmful products. For example, the cereal industry has been criticized for marketing to children. Critics worry that high-powered appeals presented through the mouths of lovable animated characters will overwhelm childrens defenses and lead them to eat too much sugared cereal
46、or poorly balanced breakfasts. Thus, in the choice of market targets, the issue is not who is targeted, but rather how and for what purpose. Socially responsible marketing calls for targeting and positioning that serve not only the companys interests but also the interests of those targeted.,5.3 Mar
47、ket Positioning,5.3.1 Choosing a Positioning Strategy Then each will have to find other ways to set itself apart. Each firm must differentiate its offer by building a unique bundle of benefits that appeal to a substantial group within the segment. The positioning task consists of three steps: identi
48、fying a set of possible competitive advantages upon which to build a position, choosing the right competitive advantages, and selecting an overall positioning strategy. The company must then effectively communicate and deliver the chosen position to the market.,1. Identifying Possible Competitive Ad
49、vantages To build profitable relationships with target customers, marketers must understand customer needs better than competitors do and deliver more value. To find points of differentiation, marketers must think through the customers entire experience with the companys product or service. An alert
50、 company can find ways to differentiate itself at every customer contact point. Beyond differentiating its physical product, a firm can also differentiate the services that accompany the product. Some companies gain services differentiation through speedy, convenient, or careful delivery. Installation can also differentiate one company from another, as can repair services. Firms that practice channel differentiation gain competitive advantages in the way they design their channels coverage, expertise, and performance.,
