Chapter 15

Market Segmentation
and Product Positioning

McGraw-Hill/Irwin Copyright © 2005 by The McGraw-Hill Companies, Inc. All rights reserved.
 Introduction
• Market segmentation: the process of dividing a
market into groups of similar consumers and
selecting the most appropriate group(s) of individuals
for the firm to serve

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 Introduction cont.
• Market segmentation process
• Analyze consumer-product relationships
• Investigate segmentation bases
• Develop product positioning
• Select segmentation strategy
• Design marketing mix strategy

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 Analyze Consumer-Product
Relationships
• Analysis of affect and cognition, behavior, and
environments involved in the purchase/consumption
process for the particular product
• Brainstorm the product concept
• Focus groups and other types of primary research
• Secondary research

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Investigate Segmentation Bases
• Segmentation bases
• Geographic
• Demographic
• Sociocultural
• Affective and
cognitive
• Behavioral
• Combined approach

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 Investigate Segmentation Bases, cont.
• Benefits segmentation (dog food)
Segment Pampered Family Dogs live Show dogs
pet member outside
Benefit Something Dog as part Something Enhance
sought extra of family cheap, dog’s
special for experience keep the appearance
our baby dog fed
well
Product Expensive Table Dry kibble, Veterinarian-
canned scraps big bag recommended
foods, from foods and
treats Costco supplements
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Investigate Segmentation Bases cont.
• Psychographic
segmentation
• Divides markets on
differences in consumer
lifestyles
• AIO questions

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• VALSTM
INNOVATORS
High Resources
High Innovation
Primary Motivation
Ideals Achievement Self-Expression

THINKERS ACHIEVERS EXPERIENCERS

BELIEVERS STRIVERS MAKERS

Low Resources
Low Innovation
SURVIVORS

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Investigate Segmentation Bases cont.
• VALS Consumer Segment:
Innovators
• Resources: highest
• Motivation: combination of all
three
• Leading edge of change
• Image as expression of taste,
independence, character
• Finer things in life

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Investigate Segmentation Bases cont.
• VALS Consumer Segment:
Thinkers
• Resources: high
• Motivation: ideals
• Mature, responsible
• Well-educated professionals
• Well-informed
• Rational decision makers
• Open to new ideas and social
change
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Investigate Segmentation Bases cont.
• VALS Consumer Segment:
Believers
• Resources: low
• Motivation: ideals
• Conservative, predictable
• Favor American products
• Modest incomes
• Lives centered on family,
church, community, nation

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Investigate Segmentation Bases cont.
• VALS Consumer Segment:
Achievers
• Resources: high
• Motivation: achievement
• Successful, work-oriented
• Satisfaction from homes and
families
• Conservative, respect status
quo
• Favor established products
that show off their success

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Investigate Segmentation Bases cont.
• VALS Consumer Segment:
Strivers
• Resources: low
• Motivation: achievement
• Values similar to Achievers
• Style is important—trying to
emulate Achievers

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Investigate Segmentation Bases cont.
• VALS Consumer Segment:
Experiencers
• Resources: high
• Motivation: self-expression
• Youngest segment
• High energy—physical and
social activities
• Spend heavily on clothing, fast
food, and music
• Like new products and services

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Investigate Segmentation Bases cont.
• VALS Consumer Segment:
Makers
• Resources: low
• Motivation: self-expression
• Practical, self-sufficient
• Focus on familiar: family, work,
physical recreation
• Little interest in broader world

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Investigate Segmentation Bases cont.
• VALS Consumer Segment:
Survivors
• Resources: lowest
• Motivation: doesn’t fit with any
of the three, resources too low
• Oldest segment
• Tend to be brand loyal

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Investigate Segmentation Bases cont.
• Person/Situation segmentation
• Based on the usage situation in conjunction with
individual differences of consumers

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 Investigate Segmentation Bases cont.
Users Middle-aged
Young Married Young Married
Married w/o
w/o Children w/ Children
Situation Children
7 Taste good 1 Kid’s simple 4 Low fat
Eat at home tastes,
inexpensive
5 Taste good, 2 Convenient, 6 Convenient,
Eat out trendy place to sit, have low fat
atmosphere inexpensive
8 Impress 3 Larger 9 Impress
Parties guests-- quantities, guests, low-fat
premium basic flavors. sorbet
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Investigate Segmentation Bases cont.
• Geodemographic segmentation
• Analyzing specific neighborhoods
• PRIZM system

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 Develop Product Positioning
• Positioning the product relative to competing
products in the minds of consumers
• By attribute
• By use or application
• By product user
• By product class
• By competitors

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Develop Product Positioning cont.
• Positioning maps

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Develop Product Positioning cont.
• Positioning maps
Simple Preparation
Hot Dogs
Tuna
Bacon
Chicken
Healthy Unhealthy
Turkey
Beef
Fresh Fish
Pork

Involved Preparation

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 Select Segmentation Strategy
• Four basic segmentation strategy alternatives
• Not enter the market
• Not segment but be a mass marketer
• Market to only one segment
• Market to more than one segment and design a
separate marketing strategy for each

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Select Segmentation Strategy cont.
• Criteria for segmentation strategy decisions
• Measurable
• Meaningful
• Marketable

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 Design Marketing Mix Strategy
• Selecting the target market and designing the
marketing mix go hand-in-hand

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 Summary
• Market segment defined
• Market segmentation process
• Market segmentation is a cornerstone of sound
marketing strategy development

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