Marketing Strategy and Competitive Positioning pdf ebook

Geographic location: geographic segmentation may be a useful variable, particularly for 
small- or medium-sized marketing operations that cannot hope to attack a widely dis-
persed market. Many companies, for example, choose to market their products in their 
home country only, implicitly excluding worldwide markets from their targets. Within 
countries it may also be possible to select regional markets where the company’s offer-
ings and the market requirements are most closely matched. Haggis, for example, sells 
best in Scotland, while sales of jellied eels are most successful in the East End of London.
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Subculture: each individual is a member of a variety of subcultures. These subcultures 
are groups within the overall society that have peculiarities of attitude or behaviour. For 
a subculture to be of importance for segmentation purposes, it is likely that membership 
of the subculture has to be relatively enduring and not transient, and that membership 
of the subculture is of central importance in affecting the individual’s attitudes and/or 
ultimate behaviour.
The major subcultures used for segmentation purposes are typically based on racial, 
ethnic, religious or geographic similarities. In addition, subcultures existing within spe-
cific age groupings may be treated as distinct market segments. For example, targeting 
‘micro-communities’ has become important in relationship marketing – one Canadian 
bank has focused to great effect on the tightly knit but affluent Filipino community in 
Canada (Svendsen, 1997).
The major drawback of all these demographic characteristics discussed as bases for seg-
menting markets is that they cannot be guaranteed to produce segments that are internally 
homogeneous but externally heterogeneous in ways that are directly relevant to the mar-
keter. Within the same demographic classes there can be individuals who exhibit very dif-
ferent behavioural patterns and are motivated by quite different wants and needs. Similarly, 
there may be significant and exploitable similarities in behaviour and motivations between 
individuals in different demographic segments. As a consequence, a generally low level 
of correspondence between demographics and behaviour has been found in the academic 
marketing research literature. Although still used due to their relative ease of measure-
ment, demographics may be losing their popularity among some practitioners as the most 
common forms of segmentation owing to the wealth of customer data available to brands. 
Procter & Gamble (P&G), for example, has shifted the focus of its segmentation strategy 

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CHAPTER 7 SEGMENTATION AND POSITIONING PRINCIPLES
by combining anonymous audience data covering 90 per cent of the US population with 
purchase data and analytics. This has allowed P&G to move from its traditional, generic 
demographic targets (for example, women or people aged between 25 and 60) to what its 
chief brand officer, Mark Pritchard, refers to as more than 350 precise ‘smart audiences’, 
which include first-time mums, new home owners and first-time washing machine owners.
Source: John Locher/AP/Shutterstock.