Peter-Olson Chapter 15
Peter-Olson Chapter 15
Peter-Olson Chapter 15
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6/1/2010<br />
<strong>Chapter</strong> <strong>15</strong><br />
Market Segmentation<br />
and Product Positioning<br />
McGraw-Hill/Irwin<br />
Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved.<br />
Introduction<br />
• Selection of the appropriate target market is<br />
paramount to developing successful<br />
marketing programs<br />
• Market segmentation is based on the idea<br />
that a single product usually will not appeal<br />
to all consumers<br />
<strong>15</strong>-2<br />
Introduction cont.<br />
• Market segmentation is the process of<br />
dividing a market into groups of similar<br />
consumers and selecting the most<br />
appropriate group(s) of individuals for the<br />
firm to serve<br />
• Five tasks in the process of market<br />
segmentation<br />
<strong>15</strong>-3<br />
1
6/1/2010<br />
Tasks in Market Segmentation<br />
Analyze Consumer-Product<br />
Relationships<br />
• Entails analysis of the affect and cognition,<br />
behavior, and environments involved in the<br />
purchase/consumption process for the<br />
particular product<br />
• Three general approaches<br />
– Brainstorm the product concept<br />
– Focus groups and other types of primary<br />
research<br />
– Secondary research<br />
<strong>15</strong>-5<br />
Analyze Consumer-Product<br />
Relationships cont.<br />
• Considerable information is available for<br />
analyzing various markets for many<br />
established product categories<br />
• For many products, the initial breakdown in<br />
markets is between the prestige and mass<br />
markets<br />
<strong>15</strong>-6<br />
2
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Investigate Segmentation Bases<br />
• No simple way to determine the best bases<br />
for segmenting markets<br />
• Four specific types of segmentation<br />
– Benefit<br />
– Psychographic<br />
– Person/situation<br />
– Geodemographic<br />
<strong>15</strong>-7<br />
Useful Segmentation Bases for<br />
Consumer Markets<br />
Useful Segmentation Bases for<br />
Consumer Markets cont.<br />
3
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Benefit Segmentation<br />
• Benefits people seek in consuming a given<br />
product is the basic reason for the existence<br />
of true market segments<br />
– Attempts to measure consumer value systems<br />
and consumers’ perceptions of various brands<br />
in a product class<br />
<strong>15</strong>-10<br />
Toothpaste Market Benefit<br />
Segmentation<br />
Psychographic Segmentation<br />
• Divides markets on differences in consumer<br />
lifestyles<br />
– Generally follows a post hoc model<br />
– Studies often include hundreds of questions and<br />
provide a tremendous amount of information<br />
about consumers<br />
– Activity, interest, and opinion (AIO) questions<br />
are sometimes very general<br />
– Validity of this segmentation is sometimes<br />
questioned<br />
<strong>15</strong>-12<br />
4
6/1/2010<br />
Psychographic Segmentation cont.<br />
– The best-known psychographic segmentation is<br />
called VALS<br />
• Based on two dimensions<br />
– Vertical dimension<br />
» Based on the degree to which they are innovative and<br />
have resources<br />
– Horizontal dimension<br />
» Motivated primarily by ideals<br />
» Motivated primarily by achievement<br />
» Motivated primarily by self-expression<br />
<strong>15</strong>-13<br />
VALS Framework and Segments<br />
<strong>15</strong>-14<br />
VALS TM Framework and Segments<br />
cont.<br />
5
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Person/Situation Segmentation<br />
• Markets can often be divided on the basis of<br />
the usage situation in conjunction with<br />
individual differences of consumers<br />
– Combines not only the person and the situation,<br />
but also other important segmentation bases<br />
• Benefits sought<br />
• Product and attribute perceptions<br />
• Marketplace behavior<br />
<strong>15</strong>-16<br />
Person/Situation Segmentation<br />
cont.<br />
<strong>15</strong>-17<br />
Geodemographic Segmentation<br />
• Identifies specific households by<br />
– Focusing on local neighborhood geography<br />
– Creates classifications of actual, addressable,<br />
mappable neighborhoods where consumers live<br />
and shop<br />
– PRIZM NE system<br />
• Based on the assumptions that consumers in<br />
particular neighborhoods are similar in many<br />
respects and that the best prospects are those who<br />
actually use a product or other consumes like them<br />
<strong>15</strong>-18<br />
6
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Develop Product Positioning<br />
• Positioning the product relative to competing<br />
products in the minds of consumers<br />
– Key objective is to form a particular brand<br />
image in consumers’ minds<br />
– Accomplished by developing a coherent<br />
strategy that may involve all of the marketing<br />
mix elements<br />
<strong>15</strong>-19<br />
Develop Product Positioning cont.<br />
– Five approaches to positioning strategy:<br />
• Attribute<br />
• Use or application<br />
• Product user<br />
• Product class<br />
• Competitors<br />
<strong>15</strong>-20<br />
Positioning by Attribute<br />
• Associating a product with an attribute, a<br />
product feature, or a customer feature<br />
– A new product can be positioned with respect to<br />
an attribute ignored by competitors<br />
– Sometimes a product can be positioned in<br />
terms of two or more attributes simultaneously<br />
– The price/quality attribute dimension is<br />
commonly used for positioning products as well<br />
as stores<br />
<strong>15</strong>-21<br />
7
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Positioning by Use or Application<br />
• Products can have multiple positioning<br />
strategies, although increasing the number<br />
involves difficulties and risks<br />
• Often a positioning-by-use strategy<br />
represents a second or third position<br />
designed to expand the market<br />
<strong>15</strong>-22<br />
Positioning by Product User<br />
• Positions products according to segments of<br />
class of users that use the product/ brand<br />
• Highlights a specific lifestyle profile<br />
<strong>15</strong>-23<br />
Positioning by Product Class<br />
• Positioning of product according to product<br />
class, usually keeping one element as the<br />
identifying category representation<br />
<strong>15</strong>-24<br />
8
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Positioning by Competitors<br />
• Competition is the explicit or implicit frame<br />
of reference<br />
– Major purpose is to convince consumers that a<br />
brand is better than the market leader on<br />
important attributes<br />
– Positioning with respect to a competitor is<br />
commonly done in advertisements in which a<br />
competitor is named and compared<br />
<strong>15</strong>-25<br />
Positioning Maps<br />
• A visual depiction of consumers’ perceptions<br />
of competitive products, brands, or models<br />
– Constructed by surveying consumers about<br />
various product attributes and developing<br />
dimension and a graph indicating the relative<br />
position of competitors<br />
– Can give marketers a sense of how their brands<br />
are perceived by consumers relative to<br />
competitors and suggest positioning strategies<br />
<strong>15</strong>-26<br />
Positioning Map for Automobiles<br />
<strong>15</strong>-27<br />
9
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Select Segmentation Strategy<br />
• Four basic segmentation strategy<br />
alternatives<br />
– May decide not to enter the market<br />
– May decide to be a mass marketer instead of<br />
segmenting<br />
– May decide to market to only one segment<br />
– May decide to market more than one segment<br />
and design a separate marketing strategy for<br />
each<br />
<strong>15</strong>-28<br />
Select Segmentation Strategy cont.<br />
• Marketers must have some criteria on which<br />
to base segmentation strategy decisions<br />
– Measurable<br />
– Meaningful<br />
– Marketable<br />
<strong>15</strong>-29<br />
Design Marketing Mix Strategy<br />
• Selecting the target market and designing<br />
the marketing mix go hand-in-hand<br />
• Many marketing mix decisions are made in<br />
conjunction with target market selections<br />
<strong>15</strong>-30<br />
10
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Summary<br />
• Market segment was defined<br />
• Market segmentation was analyzed in terms<br />
of interrelated tasks<br />
• Noted that market segmentation is a<br />
cornerstone of sound marketing strategy<br />
development<br />
<strong>15</strong>-31<br />
11