square6 The act of choosing which segment(s) to serve and which ones to ignore. Source: A Note of Consumer Market Segmentation, Harvard Business School
Targeting square6 What are the considerations in selecting a target? square6 Segment attractiveness e.g., size, growth, market share, profitability, risk, competition, reachability square6 Segment compatibility with the company e.g., compatible with the company’s competencies and strategic goals
square6 “There is a segment in the market which BMW is not catering to and that is the minivan or MPV segment. We don’t have a van because a van as it is in the market today does not fulfill any of the BMW group brand values. We all as a team said ‘no’ .” -- former BMW CEO Helmut Panke Food for Thought
Targeting Strategies square6 Range of target market Full Market Coverage Multiple Segments Individuals as Segments Mass Market Customizatio n Single Segments Source: Marketing Management, Kotler & Keller Ignoring segment differences and appeal the whole market with one offer or one strategy Targeting several segments with different products and/or marketing strategies Targeting a small segment with specific well-defined needs Tailoring products and marketing strategies to suit individual tastes
Example: Undifferentiated Marketing
Example: Differentiated Marketing
Example: Niche Marketing
Total Market “ Regular” market “ Weight- conscious” Women Example: Coca-Cola Men
The STP Process Segmentation Targeting Positioning
Positioning square6 What is positioning? square6 The process by which marketers identify a unique selling proposition for the product square6 The goal is to occupy a clear, attractive, and distinctive position in the minds of the target consumers. Source: A Note of Consumer Market Segmentation, Harvard Business School
Positioning Statement square6 A statement that specifies how the company/product wants to be perceived by the target consumers square6 Elements square6 Target market square6 Frame of reference (product category) square6 Point of difference square6 Reason to believe square6 Common form square6 To (target market), (X) is the brand of (frame of reference) that (point of difference) because (reason to believe).
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- Marketing, Harvard Business School, consumer market segmentation