Market segmentation, product differentiation, and marketing strategy
Segmentation and Differentiation Chapter 9. Segmentation Target marketing requires: –Identify and...
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Transcript of Segmentation and Differentiation Chapter 9. Segmentation Target marketing requires: –Identify and...
![Page 1: Segmentation and Differentiation Chapter 9. Segmentation Target marketing requires: –Identify and profile distinct groups of buyers who might require.](https://reader035.fdocuments.in/reader035/viewer/2022070401/56649f1d5503460f94c3404a/html5/thumbnails/1.jpg)
Segmentation and Differentiation
Chapter 9
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Segmentation
• Target marketing requires:– Identify and profile distinct
groups of buyers who might require separate marketing mixes
– Select one or more segments to enter
– Establish and communicate the product’s key benefits to the market
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What is a Target Market?
• Group of people which a firm designs, implements and maintains a marketing mix intended to meet the needs of the group.
• Options include:– Undifferentiated strategy– Concentrated strategy– Multisegment strategy
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Market Segments
• Segments v. sectors
• Segment: subgroup of people sharing 1+ characteristics that cause them to have similar product needs
• Market segmentation: process of dividing a market into a meaningful relatively similar groups.
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Criteria for segmentation
• Measurable
• Substantial
• Accessible
• Responsiveness/Actionable
• Differentiable
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Bases for Segmentation
• Geography: region, market size, climate etc.
• Demographics: age, gender, income, ethnic background, family life cycle
• Psychographic: personality, motives, lifestyles, values
• Benefit: what consumers get out of it; occasions, benefits, user status, usage rate, loyalty
• Usage rate: 80/20 rule, new users, medium users etc.
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Benefit Segmentation
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Group activity
• Candy segmentation exercise
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Making your Product Stand Out:
Positioning and the Art of Differentiation
Based in part on
Differentiate or Die:
Survival in Our Era of Killer Competition
Jack Trout
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It’s all in your head…
• Differentiation takes place in the mind.
• Minds are limited and can’t cope with a lot of information
• Minds hate confusion and love simplicity
• Minds are insecure and buy what others buy
• Minds can lose focus
• MINDS DON’T CHANGE?? Do they???
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Ad for?
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Ad for Marlboro
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Cover of what catalog?
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More help?
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Their current publication…
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USPUnique Selling Proposition
• Each ad must make a proposition to the consumer. Not just words, not just product puffery, not just show window advertising. “Buy this product and you will get this specific benefit”
• The proposition must be one that the competition cannot copy
• The proposition must be so strong that it can move millions
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The Art of Positioning
• Process that influences potential customers’ overall perception of a brand, product line or organization in general; the place in the mind relative to the competition
• Perceptual map – means of displaying or graphing, in two or more dimensions, the location of products, brands or groups of products in consumers’ minds.
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How to Do it…
• Make Sense in the Context
• Find the Differentiating Idea
• Have the Credentials
• Communicate your Difference
• It helps to be RICH!!
• Potential Errors:– Underpositioning-Crystal Pepsi– Overpositioning- Tiffany’s– Confused Positioning – NeXT
computer– Doubtful Positioning- Cadillac
Cimarron
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What are the Possibilities?
POSITION ON…
• Attribute
• Benefit
• Use or Application
• User
• Competitor
• Product Category
• Quality or price
• Repositioning
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Positioning examples
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Perceptual Map
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Bad Differentiators…• Quality and Customer Orientation
– It is a GIVEN!– 1983 – American Airlines launched a
Aadvantage program
• Price– How low can you go?– Exceptions: Wal Mart, Dell – based on
something else after price– Competitors can get around it– Unless it is high price (Rolex)
• Creativity– The A.E.s v. the Creatives– Coca Cola and Mean Joe Green;
Polar bears
• Breadth of Line – Category killers can get too big
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Good Differentiators…• Being First
– Most firsts stay first (Coke, Xerox, Advil
– Becomes the “generic advantage”– Not a guarantee of success & can be
bad idea (smokeless cigarettes)
• Attribute ownership– Own what is most important to
customer (Crest)
• Leadership– Let everyone know it
• Heritage– Based on time, location, family,
character
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Good Differentiators…• Market specialty
– Be the expert!
• Preference– Can be legitimate, ethical,
emulation (fit)
• How the product is made– Technology, special ingredient
(DiGiorno Pizza, Papa John’s), handcrafted, packaging
• Being the latest– Intel (makes itself obsolete);
ulcer meds; technology– Don’t solve a nonexistent
problem; must be better; don’t mess with tradition
• Hotness– Tastes, trends, PR
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Repositioning
• Changing customers’ perception of a brand in relation to competing brands.
• Why do it?– Changing demographics– Declining sales– Changes in social environment
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SUVs
What are the
Differentiators in this
Category?
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Dodge Durango
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Chevy Trailblazer
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Chevy Trailblazer (again)
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GMC Envoy
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Subaru Outback
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Lincoln Navigator
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Lincoln Navigator (again)
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Buick Rendezvous
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Buick Rendezvous
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Toyota Sequoia
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Toyota Highlander
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Ford Escape