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Segmenting, Targeting and Positioning in Business Marketing

Market segmentation involves dividing a market into subgroups with similar needs. It allows marketers to target specific segments effectively. The key steps are identifying segments, evaluating them based on criteria like size and fit with objectives, and selecting target segments. Common bases for segmenting business markets include industry, company size, location, and purchasing criteria. After targeting, a firm develops a positioning strategy to communicate its unique value to customers.

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Yandex Prithu
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28 views

Segmenting, Targeting and Positioning in Business Marketing

Market segmentation involves dividing a market into subgroups with similar needs. It allows marketers to target specific segments effectively. The key steps are identifying segments, evaluating them based on criteria like size and fit with objectives, and selecting target segments. Common bases for segmenting business markets include industry, company size, location, and purchasing criteria. After targeting, a firm develops a positioning strategy to communicate its unique value to customers.

Uploaded by

Yandex Prithu
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 11

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Chapter 6

Segmenting, Targeting and


Positioning in Business Marketing
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Chapter Questions
• What is market segmentation?
• What are its benefits, limitations, and
requirements?
• What is the process of segmenting and targeting
business markets?
• What are the bases used for segmenting business
markets?
• How market segments are evaluated and selected?
• What are the target market strategies?
• What is positioning and how to develop a
positioning strategy?
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What is market segmentation?


It is the process of dividing (i.e. segmenting) a
market into groups of customers (i.e. market
segments), who have similar requirements for a
product or service (i.e. market offering).

Business marketers first identify market segments


and then decide which segments to target.
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Benefits and Limitations of


Segmentation
Benefits of market segmentation:
• Enables the marketer to study the market
• Smaller firms can survive and succeed
• Effective allocation of resources to segments
Limitations of market Segmentation
• Due to small market or few customers
• Increase in marketing costs
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Requirements of Effective
Segmentation
• For effective segmentation, criteria used by
marketers to evaluate potential segments are:
• Measurable
• Substantial
• Accessible
• Differentiable
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Process of segmenting and targeting


Business Markets
• Conduct marketing research
• Identify and select macro-segments
• Go for microsegmentation (if selected macro-
segments do not explain difference in buying
behavior of buying firms)
• Profile selected target segments
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Bases / Variables for Segmenting Business


Markets
Major Macro-variables
• Type of customer or industry
• Size of customer companies
• Usage rate of customers
• Customer’s geographic location
• Application, end-use, or benefits of the product
Major Micro-variables
• Buying situations
• Customer firms’ capabilities
• Purchasing criteria
• Personal characteristics of buying-centre members
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Evaluating and Selecting Market


Segments
Criteria used for evaluating each segment:
• Size or market potential
• Market growth
• Profitability
• Competitive analysis
• Company objectives and resources
Most attractive segments that meet the company’s
objectives are selected.
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Target Market Strategies


After selecting target market segments, firms adopt
one of the following strategies:
• Concentrated marketing
• Differentiated marketing

• Undifferentiated marketing

• Niche marketing
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What is positioning?
It is a distinct (or unique) place a product (or
service) occupies in the minds of target
customers.

In business marketing, it is the value proposition of


the market offering to target customers that
should answer the question:

“Why the target customer should buy the


company’s product/service instead of
competitors’ ”
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Process of Developing Positioning


Strategy?
• Decide target market segments
(Segmenting and targeting)
• Identify major benefits for differentiation
(Through Marketing Research)
• Select one or few differentiating benefits
(Use perceptual map)
• Communicate the positioning strategy
(With clarity and consistency)

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