7-1

Lecture 4
Market Segmentation,
Targeting, and Positioning
for Competitive Advantage
Steps in Segmentation, 7-2

Targeting, and Positioning

6. Develop Marketing
Mix for Each Target Segment Market
5. Develop Positioning Positioning
for Each Target Segment
4. Select Target
Segment(s)
Market
3. Develop Measures Targeting
of Segment Attractiveness
2. Develop Profiles
of Resulting Segments
1. Identify Bases Market Segmentation
for Segmenting the Market
 7-3

Segmentation Targeting Positioning

Step 1. Market Segmentation 7-4

Levels of Market Segmentation

Mass Marketing
Same product to all consumers
(no segmentation)

Segment Marketing
Different products to one or more segments
(some segmentation)

Niche Marketing
Different products to subgroups within segments
( more segmentation)

Micromarketing
Products to suit the tastes of individuals or locations
(complete segmentation)
Step 1. Market Segmentation 7-5

Bases for Segmenting Consumer

Markets
Geographic
Nations, states,
regions or cities

Demographic
Age, gender,
family size and life cycle,
or income

Psychographic
Social class, attitude
lifestyle, or
personality

Behavioral
Occasions, benefits,
uses, or responses
Using Multiple Segmentation 7-6

Bases: Geodemographics
Step 1. Market Segmentation 7-7

Bases for Segmenting Business

Markets

Personal Demographics
Characteristics

Bases
for Segmenting
Situational Business Operating
Factors Markets Characteristics

Purchasing
Approaches
Step 1. Market Segmentation 7-8

Bases for Segmenting International

Markets

Industrial Markets

Political/
Geographic Economic
Legal

Cultural Intermarket
Step 1. Market Segmentation 7-9

Requirements for Effective Segmentation

Measurable • Size, purchasing power, profiles

of segments can be measured.

Accessible • Segments must be effectively

reached and served.

Substantial • Segments must be large or

profitable enough to serve.

Differential • Segments must respond

differently to different marketing
mix elements & actions.

Actionable • Must be able to attract and serve

the segments.
Step 2. Market Targeting 7-10

Evaluating Market Segments

• Segment Size and Growth

– Analyze sales, growth rates and expected profitability.

• Segment Structural Attractiveness

– Consider effects of: Competitors, Availability of Substitute
Products and, the Power of Buyers & Suppliers.

• Company Objectives and Resources

– Company skills & resources relative to the segment(s).
– Look for Competitive Advantages.
Step 2. Market Targeting 7-11

Market Coverage Strategies

Company
Marketing Market
Mix

A. Undifferentiated Marketing
Company
Marketing Mix 1 Segment 1
Company
Segment 2
Marketing Mix 2
Company
Segment 3
Marketing Mix 3
B. Differentiated Marketing

Segment 1
Company
Marketing Segment 2
Mix
Segment 3

C. Concentrated Marketing
 7-12

MARKET TARGETTING

• Undifferentiated marketing is a marketing strategy that aims to reach as

large an audience as possible. Instead of dividing the market into
segments, it treats all buyers as a homogeneous group and markets to
them similarly. Undifferentiated marketing is also called mass
marketing.
• Differentiated marketing occurs when a company creates campaigns
that appeal to two or more different target audiences, demographics, or
marketing segments. By targeting multiple well-defined customer
profiles, a brand can build its customer base, master its niche, and
begin to organically build brand awareness
• Concentrated marketing, also known as niche marketing, is a strategy
where a company focuses on serving a specific customer group. This
approach involves concentrating all marketing efforts and resources on
a single market segment to maximize the company's marketing
effectiveness and gain a competitive advantage.
 7-13

Examples

• Differentiated strategy - Let's take Coca-Cola, for example. They

have established a brand name and have created a beverage with a
unique taste. Despite having so many other cola beverages in the
market, one can easily differentiate the taste of coca-cola.
• Concentration strategy is a wise and sensible business strategy. It
focuses on a single niche and competes in the same category. The
world's leading fast-food brands like Subway, McDonald's, and
Starbucks follow the same concentration strategy by targeting a
specific target audience in one sort of product/service.
• A classic example of undifferentiated marketing would be just
about any Coca-Cola campaign. Coca-Cola uses the same bottle
design, the same ads and the same distribution channels to sell its
iconic soda and, with just a few exceptions, has used the
undifferentiated approach for most of its history.
Step 2. Market Targeting 7-14

Choosing a Market-Coverage
Strategy
Company
Resources- physical, finance, intellectual, human

Product
Variability – choices to offer example t-comes in different colours and sizes

Product’s Stage
in the Product Life Cycle – introduction, maturity, growth and decline

Market
Variability- period when products sells more – xmas, back to school

Competitors’
Marketing Strategies – low -cost provider e.g., Walmart leadership cost strategy
Step 3. Positioning for Competitive 7-15

Advantage

• Product’s Position - the place the product

occupies in consumers’ minds relative to
competing products; i.e. Volvo positions on
“safety”.
• For example, a company might position its product as being more
affordable or more durable than its competitors. Samsung's Galaxy
smartphones positioning is a good example of value-based positioning as
the company positioned its product as more affordable yet reliable than its
competitors.
• Marketers must:
– Plan positions to give products the greatest advantage
– Develop marketing mixes to create planned positions
Step 3. Positioning for Competitive
7-16

Advantage: Strategies

Product Product
Class Attributes

Away from Benefits

Competitors H
G
Offered
C

D
Against a E
B
Usage
Competitor F
Occasions

Users
Steps to Choosing and Implementing 7-17

a Positioning Strategy

• Step 1. Identifying a set of possible

competitive advantages: Competitive
Differentiation.

• Step 2. Selecting the right competitive

advantage.

• Step 3. Effectively communicating and

delivering the chosen position to the market.
 7-18

COMPETITIVE DIFFERENTIATION – COMPET

ADVANTAGE AND FOCUS STRATEGIES

• Competitive differentiation is how a company's product or service

is distinct from what its competitors offer. It is based on what
customers value, such as functionality, brand, pricing, or customer
service. The role of marketing is to make sure that potential buyers
understand what sets an offering apart.
• An example of differentiated marketing strategy could be a store
promoting sales keeping two different age groups in mind.
Additionally, the approach also uses different messaging in a
single campaign for different target segments
• The terms 'competitive advantage' and 'focus strategies' are often
used interchangeably with 'competitive differentiation'.
Developing Competitive 7-19

Differentiation
Product Service

Areas for Competitive

Differentiation

Personnel Image
 7-20

CONCLUSION

• Target Marketing, Market Segmentation and Product

Positioning are important tools to shape exceptional
marketing strategies

• All combined they provide the basis through which

companies set out clearly the who, why, where, when
and what questions in terms of strategies development

• The strategies varies depending on the target market

whether it’s a product or service, but the bottom line is
to have the competitive advantage.