MGT252F L0301 Week3: Segmentation, Targeting, and Positioning1 Week3 Market Segmentation, Target...
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Transcript of MGT252F L0301 Week3: Segmentation, Targeting, and Positioning1 Week3 Market Segmentation, Target...
MGT252F L0301 Week3: Segmentation, Targeting, and Positioning
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Week3
Market Segmentation,Target Market Selection,and Product Positioning
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Marketing management and STP
Develop Marketing Objectives
Marketing Mix
Market Segmentation, Target Market Selection, and Product Positioning
Situational Analysis
Market Segmentation
Target Market Selection
Product Positioning
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Steps in market segmentation, targeting, and positioning
Market Segmentation1. Identify bases for market segmentation2. Develop profiles of resulting segments
Target market selection3. Develop measures of segment attractiveness4. Select the target segment(s)
Product positioning5. Develop positioning for each target segment6. Develop marketing mix for each target market
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Heterogeneity of market: A motivation for market segmentation
The total market (consumers) for most products is too heterogeneous to be considered a single, uniform entity
Consumers are heterogeneous in their needs, preferences, perceptions, and behaviors
It’s getting more and more difficult for a firm to satisfy all customers
Answer: market segmentation
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Definition: Market segmentation
Market segmentation is the process of dividing the total heterogeneous market for a product or service into several segments, each of which tend to be homogeneous
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Bases for Market Segmentation
Geographic Region, city size, density, climate
Demographic Age, gender, family size, family life cycle, income,
occupation, education, religion, ethnic group
Psychographic personality, lifestyle
Behavior usage rate, benefit desired
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Requirement for Effective Segmentation Bases
The basis for segmentation be measurable with accessible data size, purchasing power, and profiles
The segments themselves be accessible to existing marketing institutions
The segments be large enough to be profitable
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Seg. Bases: GeographicDividing market into different
geographical units such as nations, provinces, regions, counties, cities, or neighborhoods.
(e.g.) National Post vs Toronto StarMeasurable and AccessibleGeodemographic clustering
clustering postal code areas into similar groups
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Seg. Bases: Geographic
Geodemographic clustering examplePostal code group: H3RLocation: MontrealPopulation: 8.868 (3,659 households)Average income (hh): $90,900Family structure: mainly 1 or 2 children per familyConsumption Profile (compared to national average)
More total spendingMore spending on recreation, housing, insurance, educationLess spending on tobacco and lotteries
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Segmentation Bases: Demographic(1)
Dividing market on the basis of demographic variables such as age, family size, family life cycle, gender, income, occupation, education, religion, or ethnic origin
Most widely usedMeasurable and accessible
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Segmentation Bases: Demographic(2)
Ageyouth market (aged 5 to 13)teenage (13 to 20)young adult (20 to 35)early middle age (35 to 50) ... Baby boomersmiddle age (50 to 65)older age (65 and over)
Example: McDonaldHappy meal : for youth marketBig Mac : teenagers and young adultsArch Deluxe : adults
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Segmentation Bases: Demographic(3)
Gender Traditionally used in clothing,
cosmetics, and magazine Traditional buying patterns are
increasingly breaking down Recently gender segmentation is widely
adopted in many industries
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Segmentation Bases: Demographic(4)
Family Life Cycle Six traditional family life cycle stages
+ Three alternative (non traditional) stages Change of demand by family life cycle
Bachelor: basic kitchen equipmentNewly married: durable furnitureFull nest 1: baby foodFull nest 2: educationEmpty nest: luxuriesOlder single: medical care
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Segmentation Bases: Demographic(5)
Income Spending patterns vary by income Traditionally used in automobiles,
clothing, and travel Ethnic origin
English, French, other immigrantsOther demographic bases such as
occupation, education, and religion
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Segmentation Bases: Psychographic(1)
Types Personality
Not effective basis for segmentation
Life Styleconsumers tend to buy products and services
that are consistent with their lifestyleLifestyle = f(activities, interests, opinions)
less measurable and less accessible than demographic segmentation
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Segmentation Bases: Behavior(1)
Segmentation based on how consumers interact with the product
Two types of behavioral segmentation bases Benefit desired Usage rate
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Segmentation Bases: Behavior(2)
Benefit Desired Highly related to the purchase behavior Haley’s (1968) toothpaste exampleBenefitt Segment Demographic Behavior Psychographic
Favored brands
Economy (low price) Men Heavy Users Value oriented
Brands on sale
Medical (decay prevention) Large families Heavy Users Conservertive CrestCosmetic (white teeth)
Teens, young adults Smokers Active
Aqua-Fresh
Taste (good tasting) Children
Separment lovers Hedonistic Colgate
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Segmentation Bases: Behavior(3)
Usage Rate Dividing market into nonusers, light
users, medium users, and heavy users Heavy users usually account for 80 - 90
% of total sales Heavy and light users
0% 20% 40% 60% 80% 100%
Soaps and Detergents
Toilet tissue
Shampoo
Cola
Beer
Bourbon
Heavy-user half Light-user half
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“There are so many segmentation bases, so which one should I use?”
Select segmentation basis that most appropriate for your product
When there are two or more appropriate and applicable bases, combine them (e.g.) active young male consumers
Check whether your basis is measurable, accessible, and profitable
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How to Select Target Markets
The target markets should be compatible with the organization’s goals and image
Match between target market opportunity and the company’s resource
Attractiveness of segments low competition segment size and growth rate
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Target Marketing
Based on the market aggregation level, a company’s target marketing can be one of followings Market aggregation (=mass marketing,
undifferentiated marketing) Multiple-segment targeting
(=differentiated marketing) Single-segment targeting (=concentrated
marketing)
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Market Aggregation(=undifferentiated marketing)
Single Marketing Mix
One mass, undifferentiated
market
A company ignores segment difference
A product and a marketing program appealing to the whole market
(e.g.) CokeFocusing on the
common customer need
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Multiple segment targeting(=Differentiated marketing)
Marketing Mix A
Marketing Mix B
Marketing Mix C
Market Segment A
Market Segment B
Market Segment C
A company targets several market segments with different marketing mix for each
Product differentiation is necessary
Examples Nike shoes for different
sports Automobile companies
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Example: Multiple segment targeting
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Single-Segment Targeting(=concentrated marketing)
Single Marketing Mix
Market Segment A
Market Segment B
Market Segment C
A company focuses on one or a few segments
When a company’s resources are limited
(e.g.) Jaguar Niche Marketing
When a company focus a small segment that is not served by other competitors
(e.g.) a magazine for gay
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Positioning: Overview
Definition: A strategy to create a particular brand image in consumers’ minds
Examples : Store positioning Wal-mart: Everyday low
price, convenient shopping Holt Renfrew: luxurious,
prestigious, expensive
Segmentation
Positioning
Targeting
4 p’s
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Positioning: Overview
Positioning Strategy should consider: the characteristics of
the target segments brand’s strength competition
Positioning is implemented by 4p’s (product, price, place, and promotion)
Segmentation
Positioning
Targeting
4 p’s
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Positioning Strategies
POSITIONING BY ATTRIBUTES
POSITIONING BY BENEFIT POSITIONING BY USAGE
SITUATION POSITIONING BY USERS POSITIONING BY
COMPETITORS POSITIONING BY
PRODUCT CLASS
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Positioning Strategies
POSITIONING BY ATTRIBUTES
POSITIONING BY BENEFIT POSITIONING BY USAGE
SITUATION POSITIONING BY USERS POSITIONING BY
COMPETITORS POSITIONING BY
PRODUCT CLASS
Positioning one’s product on specific product attributes
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Positioning Strategies
POSITIONING BY ATTRIBUTES
POSITIONING BY BENEFIT POSITIONING BY USAGE
SITUATION POSITIONING BY USERS POSITIONING BY
COMPETITORS POSITIONING BY
PRODUCT CLASS
Positioning one’s product on specific product attributes
Examples Hyundai Accent:
low Price BMW: performance
-- “ultimate driving machine”
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Positioning Strategies
Positioning one’s product on specific product attributes
Examples Hyundai: Price BMW: performance
-- “ultimate driving machine”
Volvo: Safety
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Positioning Strategies
POSITIONING BY ATTRIBUTES
POSITIONING BY BENEFIT POSITIONING BY USAGE
SITUATION POSITIONING BY USERS POSITIONING BY
COMPETITORS POSITIONING BY
PRODUCT CLASS
Positioning one’s product on specific benefit the product delivers
Examples Crest: cavity
prevention Aim: good taste
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Positioning Strategies
POSITIONING BY ATTRIBUTES
POSITIONING BY BENEFIT POSITIONING BY USAGE
SITUAITON POSITIONING BY USERS POSITIONING BY
COMPETITORS POSITIONING BY
PRODUCT CLASS
Positioning one’s product for a certain usage situation
Examples NyQuil : Nighttime
cold medicine
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Positioning Strategies
POSITIONING BY ATTRIBUTES
POSITIONING BY BENEFIT POSITIONING BY USAGE
SITUATION POSITIONING BY USERS POSITIONING BY
COMPETITORS POSITIONING BY
PRODUCT CLASS
Positioning one’s product for a certain class of users
Examples Johnson & Johnson
baby shampoo positioned for
BabiesAdults who are seeking
for a mild shampoo
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Positioning Strategies
POSITIONING BY ATTRIBUTES
POSITIONING BY BENEFIT POSITIONING BY USAGE
SITUATION POSITIONING BY USERS POSITIONING BY
COMPETITORS POSITIONING BY
PRODUCT CLASS
Positioning one’s product either against competitors or away from competitors
Examples Margarine (Against
competitors): “It tastes so good that I can’t
tell the difference”I can’t believe it’s not butter
Butter (Away from competitors): “Only butter is butter”
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Positioning Strategies
Positioning one’s product either against competitors or away from competitors
Examples Margarine (Against
competitors): “It tastes so good that I can’t tell
the difference”I can’t believe it’s not butter
Butter (Away from competitors): “Only butter is butter”
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Positioning Strategies
POSITIONING BY ATTRIBUTES
POSITIONING BY BENEFIT POSITIONING BY USAGE
SITUATION POSITIONING BY USERS POSITIONING BY
COMPETITORS POSITIONING BY
PRODUCT CLASS
Positioning one’s product either against competitors or away from competitors
Examples Margarine (Against
competitors): “It tastes so good that I can’t
tell the difference”I can’t believe it’s not butter
Butter (Away from competitors): “Only butter is butter”
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Positioning Strategies
POSITIONING BY ATTRIBUTES
POSITIONING BY BENEFIT POSITIONING BY USAGE
SITUATION POSITIONING BY USERS POSITIONING BY
COMPETITORS POSITIONING BY
PRODUCT CLASS
Positioning one’s product for different product class
Examples Arms & Hammer
baking soda to refrigerator deodorizer and cat litter deodorizer
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Positioning Map: Overview
Positioning maps visualize the positioning of brands on important dimensions
Positioning maps can be used for Identifying brand perception Identifying competition and market
opportunity Developing product strategy for new or
existing brands
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Positioning maps are usually derived from similarity judgment among brands
Analyze the similarity data using MDS (multi-dimensional scaling) method
Positioning Map: Input and Analysis (MDS)
Ford Taurus
Mercury Sable
Lincoln Continen.
Ford Escort
Cadillac Eldorado Jaguar XJ Mazda 626
Dodge Intrepid
Ford Taurus 7 24 8 23 17 2 5Mercury Sable 18 15 17 9 6 4Lincoln Cont. 27 1 10 21 20Ford Escort 26 25 14 12Cadillac Eld. 11 22 19Jaguar XJ 13 16Mazda 626 3Dodge Intrepid
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Positioning Map: Interpretation
Positioning map informs marketers how people perceive each product on important dimensions
The map requires the interpretation of axes X: luxuriousness Y: sportiness
Positioning Map
Jaguar
Lincoln Cont.
Cadillac
Mercury Sable
Dodge Intrepid
Mazda 626
Ford Taurus
Ford Escort
Low Luxurious
High Luxurious
Low Sporty
High Sporty
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Positioning Map: Interpretation
Each brand is perceived on luxuriousness-sportiness dimensions (e.g.) Cadillac is
perceived as highly luxurious and moderately sporty
Positioning Map
Jaguar
Lincoln Cont.
Cadillac
Mercury Sable
Dodge Intrepid
Mazda 626
Ford Taurus
Ford Escort
Low Luxurious
High Luxurious
Low Sporty
High Sporty
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Positioning Map: Interpretation
Each brand is perceived on luxuriousness-sportiness dimensions (e.g.) Cadillac is perceived
as high luxurious and low sporty
Clusters of brands indicate high competition among them (e.g.) 626, Sable, Taurus,
and Intrepid
Positioning Map
Jaguar
Lincoln Cont.
Cadillac
Mercury Sable
Dodge Intrepid
Mazda 626
Ford Taurus
Ford Escort
Low Luxurious
High Luxurious
Low Sporty
High Sporty
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Positioning Map: Interpretation
Niches can be identified in the map (e.g.) Jaguar
Positioning Map
Jaguar
Lincoln Cont.
Cadillac
Mercury Sable
Dodge Intrepid
Mazda 626
Ford Taurus
Ford Escort
Low Luxurious
High Luxurious
Low Sporty
High Sporty
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Positioning Map: Interpretation
Niches can be identified in the map (e.g.) Jaguar
The map can also show ideal points of each segment
Positioning Map
Jaguar
Lincoln Cont.
Cadillac
Mercury Sable
Dodge Intrepid
Mazda 626
Ford Taurus
Ford Escort
Low Luxurious
High Luxurious
Low Sporty
High Sporty
S1
S3
S2
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Positioning Map: Marketing Implications
The map provides market opportunity for new products Market gap Ideal point
Positioning Map
Jaguar
Lincoln Cont.
Cadillac
Mercury Sable
Dodge Intrepid
Mazda 626
Ford Taurus
Ford Escort
Low Luxurious
High Luxurious
Low Sporty
High Sporty
S1
S3
S2
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Positioning Map: Marketing Implications
The map provides market opportunity for new products Market gap Ideal point
The map also helps repositioning existing brands (e.g.) Ford Escort
Positioning Map
Jaguar
Lincoln Cont.
Cadillac
Mercury Sable
Dodge Intrepid
Mazda 626
Ford Taurus
Ford Escort
Low Luxurious
High Luxurious
Low Sporty
High Sporty
S1
S3
S2
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“How to draw a positioning map for your group project”
1. Select most important dimensions(e.g.) cell phone: weight and price
2. Ask people about how they evaluate each brands on the important dimensions
3. Draw a map based on the responses