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MSIN7009
Introduction to Marketing
January 22nd 2018 - Week 3
Segmentation
THIS WEEK
- Segmentation
- Targeting strategies
- Differentiation
- Product positioning
Segmentation: Divide market into subgroups
→ The marketing mix (strategy) should be able to tailor to that segment
EX​ - 8 million left-handed people in the UK, yet there is no segmentation for left-handed
Segmentation​: Dividing the market according to specific criteria
Age, gender, socio-economic status, tastes, etc
Definition​: The art of discerning and defining meaningful differences
between groups of customers to form the foundations of a more focused marketing mix
Process​:
- Market segmentation
- Market targeting
- Market positioning
Today’s management of marketing don’t believe that one product fits all
Even companies like Apple have segmented with iPhone 5C, iPhone 8, iPhone X, etc

Stages of Segmentation for B2B & B2C Markets
Differences
- One is interested in the end consumer while the other is usually not
- B2C is more challenging that B2B
B2B ​- 2 parts
Macro and micro
- Macro → size, location, usage rate (how often they use your product
- Micro → product, applications, technology, purchasing and decision-making processes,
buyer-seller relationships

B2C​ → usually larger segments, segmentation based on behavior of consumer, more emphasis
on lifestyle and context
- What makes a segment profitable? Its size
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Consumer product usage categories → Graph in slides
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Segmentation Targeting Strategies
Undifferentiated, Differentiated, Concentrated, Micro-marketing
Concentrated targeting strategy (Niche marketing)
- You only focus on one customer group / segment
- Can lead to very detailed knowledge of the segment’s wants and needs
- This strategy can help keep costs down as there is only one marketing mix to develop
- Helps to develop a niche market
- Advantage​: Occasion to have a larger part of the market as this market is so specific
Differentiated targeting strategy

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Involves the development of a number of different marketing mixes for different
segments
Allows a business to tailor its offerings to suit different segments
Spreads risk across market segments
Requires a detailed overview of the market and its development potential
Can dilute a company’s efforts

Undifferentiated targeting strategy
- Least popular and demanding strategy
- Assumes that the market is one homogeneous unit with no significant references
- One single marketing mix serving all needs
- Relatively inexpensive
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Criteria for successful segmentation
Distinctiveness
Tangibility
Accessibility
Defendability ​(Defend your place in that market)
Scale
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Differentiating markets
→ Product Differentiation
- Features and benefits
- Quality
- Performance
- Innovation
- Consistency
- Reliability
- Style and Design
- Durability
- Repairability
→ Personnel Differentiation
- Hiring techniques
- Training techniques
- Customer focused
→ Image Differentiation
- Images that reflect the ‘soul’ of ethos of the company
Product positioning

- Strengthen current position
- Search for new, unoccupied position
- De-position or re-position the competition
→ Product attributes
→ Technical items - BMW breathable fresh air filters
→ Benefits offered - Crest toothpaste reduces cavities
→ Usage occasions - Kit Kat, “Have a break”
→ Users → Activities - Omega, the ‘first and only watch on the moon’
→ Personalities - Tiger Woods for Nike
→ Cult positioning
→ Origin
→ Positioned with synergistic products and brands
→ Positioned against competitors
→ Positioned away from competitors
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Common positioning errors
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Under positioning
Over-positioning
Confused positioning
Implausible positioning

To accomplish a good positioning strategy
- Features and benefits must be important to the consumer
- Must be distinctive from the competition
- Must deliver superior quality or service
- Difference must be communicable and visible to buyers
- Pre-emptive
- Affordable
- Profitable

Case Study Preparation

SEMINAR NOTES
Case study​: Pink pound - marketing to the LGBT community (specifically holiday packages)
→ Order of importance
- Geographical:
- Which town is more gay?
- LGBT community tends to live in urban areas more (since they are liberal)
- Places where the attitude towards sexual orientation is liberal (Sort of
psychographic)
- Psychographic:
- Destination where homosexuality is tolerated
- Where liberal people are
- Demographic:
Age not important
- Gender not important
- Younger population?
- Behavioral:
→ What are the risks associated to segmenting the gay community from other segments
Rewards:
- Gay couples have more spending power than straight couple, can charge premium
prices
Risks:
- Over-generalization / labelling
- Narrowing down your segment / losing potential customers
- Stirring things for the sake of it, even if this segmentation is not really necessary
- Trust issues between you and company → riding the trend market (Doing this only to
include gay community and supposedly seem more open
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Geographical Segmentation: Depending on location
Psychographic Segmentation: Social classes, lifestyles, attitude
Demographic Segmentation: age, gender,
Behavioral Segmentation: benefit sought, end use, user rate
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