12 SENIOR HIGH SCHOOL

PRINCIPLES OF
MARKETING
Quarter 3 – Module 8
Target Market Segmentation
and Positioning

NegOr_Q3_Principles of Marketing12_Module8_v2
Principles of Marketing – Grade 12
Alternative Delivery Mode
Quarter 3 – Module 8: Target Market Segment and Positioning
Second Edition, 2021

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NegOr_Q3_Principles of Marketing12_Module8_v2
Introductory Message

This Self-Learning Module (SLM) is prepared so that you, our dear

learners, can continue your studies and learn while at home. Activities,
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Please use this module with care. Do not put unnecessary marks on
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Thank you.

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 I
This module was designed to provide with fun and meaningful opportunities for
guided and independent learning at our own pace and time. You will be enabled to process
the contents of the learning resource while being an active learner.

Market segmentation is a two-step process of: naming broad product markets, and
segmenting those markets in order to select target markets. Most segmentation efforts fail
because inexperienced marketers attempt to find one or two demographic characteristics to
segment a mass market. Generally, customer needs and behaviors do not fit nicely into one or
two demographic characteristics. This section of the report will outline Best Practices related
to segmenting your various product markets.

From a high-level, the goal of a marketing strategy is to identify a target market and
develop a marketing mix that will appeal to those potential customers. Decisions regarding the
ideal marketing mix can be organized in terms of Price, Promotion, Product, and Price.
However, the goal is not to just come up with a particular strategy, but rather to focus on
providing value to your key market segments.

Pre-assessment:
A. TRUE or FALSE
Directions: Write TRUE if the statement is correct or FALSE if incorrect. Write your answer
on your activity notebook.

___________ 1. The perception of a property by its guests or potential guests is known as the
property’s market segmentation.
___________ 2. A positioning statement effectively communicates the property’s advantages
to its target markets.
___________ 3. Positioning is about advertising only.
___________ 4. Discovering the needs and wants of each segment is part of developing a
positioning strategy.
___________5. Once the property has determined its guest mix, it is considered wasteful to
review it.

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B. MULTIPLE CHOICE
Directions. Choose the letter of the correct answer and write it on your activity notebook.

1. Market segmentation is:

A. The number of zip codes represented by the hotel’s guests.
B. Viewing a market as a number of smaller market segments with similar product
and service preferences.
C. A balance between types of guests, such as business travelers, leisure vacationers,
corporate groups, etc.
D. All of the above.
E. None of the above

2. It can help identify existing market segments.

A. Surveys
B. Positioning statements
C. Guest profiles
D. Revenue grids
E. Both b and c

3. Which forms help a hotel determine the guest base and the decline or growth of a market
segment?
A. Revenue forecasts
B. Revenue grid
C. Occupancy chart
D. Both b and c
E. All of the above

4. Which of the following is not a way that a market can be segmented?

A. Room type
B. Demographics
C. Geography
D. Lifestyle
E. Psychographic

5. The process of designing a property’s market position is known as:

A. Market segmentation.
B. Guest profiling.
C. Positioning.
D. Strategic planning.
E. Differentiation

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 ’s In

Task 1. Review
Since you already know few topics about preparation of budgets let us review few items that
will help us in learning the lesson.

Direction: Enumerate the following.

A. What are the four (4) basic types of market opportunities:

1.
2.
3.
4.

B. What are the three (3) positioning strategies that business competitors commonly have.
1.
2.
3.

’s New

Task 2. Identification
Direction: Identify the correct word from the jumbled letters based on the given definition.

1. Metkar Pentertiona is the attempt to increase sales of current products in present

markets. Some strategies to penetrate markets include: more aggressive marketing, increasing
service to improve renewal rates, or attracting competitor customers directly.

2. Markte Dovementlop is the effort to increase sales by selling current products

into new markets. Firms may advertise to reach new target customers within a geographic
region, or look to international markets for expansion.

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3. Proctdu Devmentelop refers to offering new or improved products to present
markets. By working closely with your customers, you may find new and innovative ways to
better satisfy your target market.

4. Diversationific means opening completely new lines of business, with new products
in new markets. Many organizations diversify their product mix to mitigate risks related to
economic variables such as recessions.

is It

As a starting point, most marketers conduct an internal analysis or their organization to

identify which opportunities make the most sense to pursue. Use S.W.O.T. Analysis Tool to
get started. This framework identifies the firm’s Strengths, Weaknesses, Opportunities, and
Threats, with special attention paid to the various implications stemming from each.

Once you have a clear understanding of your firm’s capabilities and resources, you are
ready to analyze the external environment to seek market opportunities that fit your
organization’s goals and objectives. Next, use the S.W.O.T Analysis Tool to review of the
Social, Technological, Economic, and Political issues affecting your firm’s ability to capitalize
on a market. Combining the internal and external analyses provides a foundation for evaluating
potential market opportunities, and serves as a basis for objectively comparing the
attractiveness of each opportunity.

It is helpful to view marketing strategy planning as a process of segmenting markets,

targeting specific customers, and working to effectively position you’re offering among the
competition. The following sections in this report will outline how to effectively segment,
target, and position, your product or service. There are four basic types of market opportunities:
Market Penetration, Market Development, Product Development, and Diversification.

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Figure 1. Four Basic Types of Opportunities. Sources:
https://www.google.com/search?q=four+basic+types+of+market+opportunities&rlz

The question becomes: which opportunities should be evaluated first? The answer falls
out of a sound analysis of existing markets and potential new markets. Most companies look
to markets that are close to home, since they are more familiar and can be responded to quickly.

Additionally, it is more profitable to retain, rather than recruit new customers. For these
reasons, market penetration is usually the first type of opportunity a firm will evaluate.
Conversely, many organizations have found that market development, especially in rapidly
growing China and India, is the key to their success. The next section will outline what
“markets” are, and provide pragmatic advice for market segmentation.

Market Segmentation Best Practices

Market segmentation is a two-step process of: naming broad product markets, and
segmenting those markets in order to select target markets. Use Demand Metric’s MARKET
SEGMENTATION TOOL to help you with market sizing and analysis, and to develop
customer profiles. Most segmentation efforts fail because inexperienced marketers attempt to
find one or two demographic characteristics to segment a mass market. Generally, customer
needs and behaviors do not fit nicely into one or two demographic characteristics. This section
of the report will outline Best Practices related to segmenting your various product markets.

1. Defining Generic and Product Markets. A market is a group of potential customers who
have similar needs and are willing to purchase goods or services to satisfy those needs. Good
marketers focus on the customer and develop marketing mixes for very specific target markets.
On the other hand, poor marketers focus on their products when defining markets, leading to

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missed opportunities and questionable customer satisfaction. The point here is that a market is
external to an organization; it doesn’t make sense to segment potential markets based on the
features contained in your products or services. When narrowing down the mass market, it is
helpful to think of two basic types of markets: generic markets and product markets.

A generic market is a market of customers with generally similar needs, which

organizations satisfy in a variety of ways. An example of a generic market would be the
transportation market for a city; buses, trains, cars, bicycles, and walking, are all methods of
getting around town. Contrastingly, a product market is a market of customers with very
similar needs. An example of a product market would be for laptop computers, where customers
have the choice between products from Microsoft, Dell, Apple, Fujitsu, etc. In evaluating
potential market opportunities, look for a definition that is broader than your firm’s current
product market, but not so broad that your firm could not handle the demand if it were
generated. Work to establish a slightly broader definition for your current product markets.

When defining your product market, there are four important aspects:

What - Product Type

To Meet - Customer Needs

Who - Customer Segments

Where - Geographic Region

An example of a product market might be “marketing advisory services for mid-sized

enterprises in North America with limited budgets.” Once you have defined your product
markets, you are ready to continue the segmentation process to identify potential target
markets.

2. Understand Common Market Segment Dimensions. There are common market segment
dimensions for consumer and B2B markets. Following are two lists containing sample
dimensions that can be used to slice and dice your consumer or B2B product markets. Be very
careful when selecting your dimensions, as these parameters will form the basis for defining
your target markets.

* Note: the following lists are meant to provide examples that will stimulate your
thinking of applicable dimension. There are thousands of variables that could be used for this
exercise, so be sure to carefully select the right dimensions for your market.

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B2C Segmentation Criteria

Demographic:
● Age ● Income ● Marital
● Status ● Education ● Family Size
● Gender ● Geographic Location ● Social Status
● Occupation
Psychographic:
● Brand Preferences ● Price Sensitivity
● Conservative/Liberal ● Enviro-Friendly
● Hobbies ● Lifestyle
● Information Sources ● Service Preferences
● Buy Based on Trends ● Spontaneity
● Influenced by Peers ● Relationship Importance
Behavioral:
● Purchase History ● Where They Shop
● Type of Store Preferences ● Association Memberships
● Internet Usage ● Impulsiveness
Environmental:
● Country of Residence ● Political Climate
● Currency ● Payment Methods
● Shipping & Receiving ● Languages Spoken

B2B Segmentation Criteria

Demographic:
● Annual Revenue ● # Employees
● Industry ● # Locations
● Years in Business ● Markets Served
● Products/Services ● Job Title
● Level of Experience/Seniority
Psychographic:

● Resistance to Change ● Diversification Oriented

● Open Minded/Rigid ● Decision Making Process
● Early Adopter/Follower ● Growth Oriented/Static
● Technology Sophistication ● Professionalism
● Require Referrals ● Awareness of Competitors
● Risk Aversion ● Loyalty
● Market Focused/Product Focused

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 Behavioral:
● Website Visits ● Responses to Marketing
● Purchasing Methods ● Association Memberships
● Internet Usage ● Social Media Groups
● Collateral Views/Downloads
Environmental:
● Technology Landscape ● Purchasing Power
● Management Practices ● Purchasing Process
● Business Culture

3. Group Customers into Homogeneous Micro Segments. In this stage of the segmentation
process, your goal is the find customers who have similar needs that will respond to a marketing
mix in a predictable manner. Following are 4 criteria that strong market segments have in
common:

Homogeneous - customers in a market segment should be very similar in both their

segment dimensions and their likely response to a marketing mix.

Heterogeneous - customers in different market segments should be as divergent as

possible with other segments.

Economic Upside - the segment needs to be large enough, or predicted to grow

sufficiently, to be profitable.

Operational - the segment dimensions should be helpful for understanding &

identifying customers and making decisions regarding the marketing mix.

It is essential that market segments are operational. The whole point of segmenting is
to assist with better targeting, positioning, and decision-making; be sure that your segment
dimensions are extremely relevant. Once you have established distinct market segments based
on various dimensions, you are ready to start targeting your potential customers. The next
section of the report provides advice pertaining the effective target marketing techniques.

Target Marketing

Following are 5 criteria that indicate whether you have selected a viable target market:
size, expected growth, competitive position, cost to reach, and compatibility.

Size - how large is this target market? Worth pursuing?

Expected Growth - even if the market is small, it may be profitable if there are
indications that it will grow.

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 Competitive Position - low competition equals attractive market.

Cost to Reach - is this market accessible with our tactics?

Compatibility - how aligned is this market to our goals?

Positioning and Competitive Differentiation

The final stage in developing a strategic marketing plan is to analyze the target market
to identify where competitors are positioned, and which attributes are most important when
customers are making a purchase. To understand your current market position, conduct a
simple market research project to identify which product-class attributes are most important,
which brands are perceived to best deliver each attribute, and where product improvements
need to be made to improve customer satisfaction? There are two basic strategies when it comes
to positioning: head-to-head and differentiation.

Positioning means developing a theme which will provide a “meaningful distinction

for customers”. Competitors have three possible positioning strategies:

1. The firm may choose to strengthen its current leadership position by reinforcing
the original concepts that led to the first position in the mind of the customer.

2. The firm might establish a new position – “cherchez le creneaux” – looking for
new openings in a market.

3. The firm might try to de-position or re-position the competition.

Three positioning value disciplines

1. Operational excellence
2. Customer intimacy
3. Product leadership

Re-Positioning

If a current position has been rendered useless by competitor pressure or customer

indifference or because the results are disappointing, new positioning is necessary.

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Four-step process for reassessing a positioning theme:

1. Identify alternative positioning themes.

2. Screen each alternative according to whether it is:

o Meaningful to customers;
o Feasible given the firm’s competencies and
customer perceptions of the firm;
o Superior/unique vs. competition; difficult for them to match;
o Congruent with company objectives.

3. Choose the position that best satisfies the criteria, and generates the most
enthusiasm and commitment within the organization.

4. Design the programs needed to implement the position. Compare costs

of these programs with likely benefits.

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 ’s More

Task 3
Matching type
Directions: To answer question from Column A match it with Column B.

Column A Column B
1. It is the attempt to increase sales of
current products in present markets. A. Positioning

2. It is the effort to increase sales by B. Market Penetration

selling current products into new
markets. C. Diversification

3. It refers to offering new or improved D. Product Development

products to present markets.
E. Segmentation
4. It means opening completely new
lines of business, with new products in F. Market Development
new markets.

5. It means developing a theme which

will provide a “meaningful distinction
for customers”

I Have Learned

Directions: Read the questions carefully, and answer the following questions. Write your
answers in your activity notebook.

1. What is the importance of having a target market for a product or a service?

2. In your own opinion, what are some of the reasons why positioning is an important tool
for competitive advantage?
3. How can a brand be successfully positioned for consumers of several target markets?
Explain your answer.

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 I Can Do

Task 5

Direction: In following the five (5) criteria in Target Marketing, indicate whether you have
selected a viable target market: size, expected growth, competitive position, cost to reach, and
compatibility. Fill in the table below.

Target Marketing Criteria Guide Questions Example

1. Size
2. Expected Growth
3. Competitive Position
4. Cost to Reach
5. Compatibility

The rubrics below will be used to identify your score for this performance.
Level of General Approach Comprehension
Achievement
Exemplary •Addresses the task. •Demonstrates an accurate and
(20 pts quizzes) •States a relevant, justifiable complete understanding of the task.
answer. •Backs conclusions with data and
•Presents arguments in a logical warrants.
order. •Uses 2 or more ideas, examples
and/or arguments that support the
answer.
Adequate •Does not address the task •Demonstrates accurate but only
(15 pts quizzes) explicitly, although does so adequate understanding of question
tangentially. because does not back conclusions
•States a relevant and justifiable with warrants and data.
answer. •Uses only one idea to support the
•Presents arguments in a logical answer.
order. •Less thorough than above.
Needs •Does not address the task. •Does not demonstrate accurate
Improvement •States no relevant answers. understanding of the task.
(10 pts quizzes) •Indicates misconceptions. •Does not provide evidence to
•Is not clearly or logically support their answer to the task.
organized.
No answer (0 pts)

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A. MULTIPLE CHOICE
Directions. Choose the letter of the correct answer.

1. In effective target market, marketers should focus on:

a) Market segmentation
b) Market Targeting
c) Market positioning
d) All of the above
e) None of the above
2. _____ segmentation calls for dividing the market into groups based on age, family,
size, family life cycle, gender, income, etc.
a) Geographic
b) Psychographic
c) Intuitive
d) Behavioral
e) Demographic
3. In _____ segmentation, buyers are divided into groups on the basis of their
knowledge of, attitude toward, use of, or response to a product.
a) intuitive
b) psychographic
c) behavioral
d) demographic
e) geographic
4. In _____ specialization a firm selects a number of segments, each objectively
attractive and appropriate.
a) differentiated
b) market
c) product
d) full market
e) selective
5. In _________segmentation, buyers are divided into different groups on the basis of
lifestyle or personality or values.
a) behavioral
b) intuitive
c) geographic
d) demographic
e) Psychographic

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B. IDENTIFICATION
Directions. Identify the correct answer of the following. Write your answer on the space
provided.

_____________1. It is a market of customers with generally similar needs, which organizations

satisfy in a variety of ways
_____________2. It is a two-step process of: naming broad product markets, and segmenting
those markets in order to select target markets.
_____________3. is the effort to increase sales by selling current products into new markets.
Firms may advertise to reach new target customers within a geographic region, or look to
international markets for expansion.
_____________4. It is an opening completely new lines of business, with new products in new
markets. Many organizations diversify their product mix to mitigate risks related to economic
variables such as recessions.
_____________5. It is a developing a theme which will provide a “meaningful distinction for
customers”.

REFLECTION

Complete the following statements. Write your statements in your activity notebook.

1. As an ABM student, I have learned…_______________________.

2. As an ABM student, it is very important for us to learn…_______________________.

3. Using the knowledge I have learned in this lesson, I will be able to...
_______________________.

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NegOr_Q3_Principles of Marketing12_Module8_v2
15
WHAT I KNOW
A. True or False
1. False
2. True
3. False
4. True
5. False
B. Multiple Choice
1. B 2. C
3. D 4. A 5. C
WHAT’S IN
TASK 1
Identification:
A. What are the four (4) basic types of market opportunities:
1. Market Penetration
2. Market Development
3. Product Development
4. Diversification
B. Identify the three (3) positioning strategies that business competitors commonly have.
1. The firm may choose to strengthen its current leadership position by reinforcing the original concepts
that led to the first position in the mind of the customer.
2. The firm might establish a new position – “cherchez le creneaux” – looking for new openings in a
market.
3. The firm might try to de-position or re-position the competition.
 NegOr_Q3_Principles of Marketing12_Module8_v2
16
WHAT’S NEW
TASK 2
1. Metkar Pentertiona is the attempt to increase sales of current products in present markets. Some strategies to penetrate
markets include: more aggressive marketing, increasing service to improve renewal rates, or attracting competitor
customers directly.
M a r k e t P e n e t r a t i o n
2. Markte Dovementlop is the effort to increase sales by selling current products into new markets. Firms may advertise
to reach new target customers within a geographic region, or look to international markets for expansion.
M a r k e t D e v e l o p m e n t
3. Proctdu Devmentelop refers to offering new or improved products to present markets. By working closely with your
customers, you may find new and innovative ways to better satisfy your target market.
P r o d u c t D e v e l o p m e n t
4. Diversationific means opening completely new lines of business, with new products in new markets. Many
organizations diversify their product mix to mitigate risks related to economic variables such as recessions.
D i v e r s a f i c a t i o n
WHAT’S MORE
1. It is the attempt to increase sales of current `
products in present markets.
2. It is the effort to increase sales by selling current D. Product Development
products into new markets.
3. It refers to offering new or improved products to E. Segmentation
present markets.
4. It means opening completely new lines of C. Diversification
business, with new products in new markets.
5. It means developing a theme which will provide A. Positioning
a “meaningful distinction for customers”
ASSESSMENT
A.
1. D 2. E 3. C 4. E 5. E
B.
1. Generic market
2. Market segmentation
3. Market development
4. Diversification
5. Positioning
Glossary

Economic Upside - the segment needs to be large enough, or predicted to grow sufficiently, to
be profitable.

Homogeneous - customers in a market segment should be very similar in both their segment
dimensions and their likely response to a marketing mix.

Heterogeneous - customers in different market segments should be as divergent as possible

with other segments.

Operational - the segment dimensions should be helpful for understanding & identifying
customers and making decisions regarding the marketing mix.

Market means by which the exchange of goods and services takes place as a result of buyers
and sellers being in contact with one another, either directly or through mediating agents or
institutions.

Market segmentation is a process of defining or describing different submarkets, or niches,

through identifying common needs and wants within a segment, as well as of distinguishing
between different segments

Product is an article or substance that is manufactured or refined for sale.

Segment means each of the parts into which something is or may be divided.

Service is a system supplying a public need such as transport, communications, or utilities such
as electricity and water or performs routine maintenance or repair work on (a vehicle or
machine).

S.W.O.T. Analysis Tool is a simple but useful framework for analyzing your organization's
strengths, weaknesses, opportunities, and threats. It helps you to build on what you do well, to
address what you're lacking, to minimize risks, and to take the greatest possible advantage of
chances for success.

Types is a category of people or things having common characteristics.

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References
Websites

Dawn Iacobucci, 2019. Marketing Manangement, Fifth Edition Canada. 2019. Accessed December
16, 2021.
https://www.bing.com/search?q=Dawn+Iacobucci%2C+2019.+Marketing+Manangement%2C+Fifth+
Edition+Canada&cvid=edf68effd2ac459e842c0c38292c7eb5&aqs=edge..69i57.2426j0j1&pglt=43&F
ORM=ANSPA1&DAF0=1&PC=NMTS.

Deiss, R. & Henneberry, R. 2017. Accessed December 16, 2021. Deiss, R. & Henneberry, R., 2017.
Digital Marketing for Dummies, Seventh Edition New JerseyDeiss, R. & Henneberry, R., 2017. Digital
Marketing for Dummies, Seventh Edition New Jersey.

how-to-identify-a-target-market-and-prepare-a-customer-profile/. n.d. edwardlowe.org. Accessed

December 16, 2021. https://edwardlowe.org/how-to-identify-a-target-market-and-prepare-a-
customer-profile/.

n.d.AccessedDecember16,2021.
https://corporatefinanceinstitute.com/resources/knowledge/strategy/market-positioning/.

Saunder, L & Cornett. 2019. Accessed December 16, 2021.

https://www.bing.com/search?q=Saunder%2C+L+%26+Cornett%2C+MM%2C+2019.+Financial+Mark
ets+and+Institutions%2C+Seventh+Edition+New+York&cvid=3fddc742684349f1b435d6fd5114b46e
&aqs=edge..69i57.118088j0j9&FORM=ANAB01&DAF0=1&PC=NMTS

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