Segmenting, Targeting & Positioning
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Transcript of Segmenting, Targeting & Positioning
SUHAILYMR 1
CHAPTER 4
SEGMENTING AND TARGETING MARKET
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LEARNING OUTCOMES
LO 1 Describe the characteristics of markets and market segments
LO 2 Discuss criteria for successful market segmentation
LO 3 Describe the bases commonly used to segment consumer markets
LO 4 List the steps involved in segmenting markets
LO 5 Discuss alternative strategies for selecting target markets
LO 6 Explain how and why firms implement positioning strategies and how product differentiation plays a role
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(1) people or organizations with
(2) needs or wants, and with
(3) the ability and
(4) the willingness to buy.
A group of people that lacks any one of these characteristics is not a market.
A MARKET IS...LO 1
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MARKET SEGMENTATION
MarketMarketPeople or organizations with needs or wants and the ability and willingness to buy.
People or organizations with needs or wants and the ability and willingness to buy.
MarketSegmentMarket
Segment
A subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs.
A subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs.
MarketSegmentation
MarketSegmentation
The process of dividing a market into meaningful, relatively similar, identifiable segments or groups.
The process of dividing a market into meaningful, relatively similar, identifiable segments or groups.
LO 1
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THE CONCEPT OF MARKET SEGMENTATION
LO 1
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THE IMPORTANCE OF MARKET SEGMENTATION
u Markets have a variety of product needs and preferences.
u Marketers can better define customer needs.
u Decision makers can define objectives and allocate resources more accurately.
LO 1
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REVIEW LEARNING OUTCOMEThe Importance of Market Segmentation
Marketsegmentation
More precise definition of customers needs and wants
More accurate marketing objectives
Improved resource allocation
Better marketing results
LO 1
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CRITERIA FOR SUCCESSFUL SEGMENTATION
SubstantialitySegment must be large
enough to warrant a special marketing mix.
Identifiabilityand
MeasurabilitySegments must be identifiable and
their size measurable.
AccessibilityMembers of targeted segments must
be reachable with marketing mix.
ResponsivenessUnless segment responds to a
marketing mix differently, no separate treatment is needed.
LO 2
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REVIEW LEARNING OUTCOMESuccessful Market Segmentation
Usefulsegment?
þ Substantialþ Identifiable and measurableþ Accessibleþ Responsive
Then, yes: Useful segmentation scheme
LO 2
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BASES FOR SEGMENTING CONSUMER MARKETS
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SegmentationBases
SegmentationBases
Characteristics of individuals, groups, or organizations used to divide a total market into segments. (variables)
LO 3
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Bases for Segmentation
Usage RateUsage Rate
Benefits SoughtBenefits Sought
PsychographicsPsychographics
DemographicsDemographics
GeographyGeography
LO 3
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Geographic Segmentation
• Region of the country or world• Market size• Market density• Climate
Different brand for different countries è
LO 3
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Geographic Segmentation
Benefits of Regional Segmentation
• New ways to generate sales in sluggish and competitive markets
• Scanner data allow assessment of best selling brands in region
• Regional brands appeal to local preferences
• Quicker reaction to competition
LO 3
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DEMOGRAPHIC SEGMENTATION
AgeAge
GenderGender
IncomeIncome
Ethnic backgroundEthnic background
Family life cycleFamily life cycle
LO 3
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DEMOGRAPHIC SEGMENTATION Gender Segmentation
• Women, nowadays …– handle 75% of family finances– Influence 80% of consumer purchases – Make purchase decisions about variety
of goods and services• New cars, hardware stores,
electronics, etc.• Other brands that have targeted men are
trying to target women– Gillette razors, Rogaine baldness
remedy, Nike, Reebok, etc.
LO 3
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DEMOGRAPHIC SEGMENTATION Income Segmentation
• Income – popular demographic variable for segmenting markets
• Lexus, Porsche, BMW catering to wealthy customers
• Price-sensitive consumers– Tesco brand– Econsave – Perodua Kancil
LO 3
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DEMOGRAPHIC SEGMENTATION Ethnic Segmentation
• Largest ethnic markets are:– Malays– Chinese– Indian
LO 3
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DEMOGRAPHIC SEGMENTATION Family Life Cycle
Age
MaritalStatus Children
LO 3
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DEMOGRAPHIC SEGMENTATION Family Life Cycle
LO 3
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PSYCHOGRAPHIC SEGMENTATION
PsychographicSegmentationPsychographicSegmentation
Market segmentation on the basis of personality, motives, lifestyles, and geodemographics.
LO 3
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BASES FOR PSYCHOGRAPHIC SEGMENTATION
PersonalityPersonality
MotivesMotives
LifestylesLifestyles
GeodemographicsGeodemographics
LO 3
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PSYCHOGRAPHIC SEGMENTATION Lifestyle Segmentation
• How time is spent• Importance of things around them• Beliefs• Socioeconomic characteristics
LO 3
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PSYCHOGRAPHIC SEGMENTATION Geodemographic Segmentation
GeodemographicSegmentation
GeodemographicSegmentation
Segmenting potential customers into neighborhood lifestyle categories.
Combines geographic, demographic, and lifestyle segmentation.
LO 3
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BENEFIT SEGMENTATION
BenefitSegmentation
BenefitSegmentation
The process of grouping customers into market segments according to the benefits they seek from the product.
LO 3
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BENEFIT SEGMENTATION
Usage-RateSegmentation
Usage-RateSegmentation
Dividing a market by the amount of product bought or consumed.
Dividing a market by the amount of product bought or consumed.
80/20Principle
80/20Principle
A principle holding that 20 percent of all customers generate 80 percent of the demand.
A principle holding that 20 percent of all customers generate 80 percent of the demand.
LO 3
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REVIEW LEARNING OUTCOMEBases for Segmenting Consumer Markets
Geography Demographics Psychographics Benefits Usage Rate
• Region• Market size• Market
density• Climate
• Age• Gender• Income• Race/ethnicity• Family life
cycle
• Personality• Motives• Lifestyle• Geodemo-
graphics
• Benefitssought
• Former• Potential• 1st time• Light or
irregular• Medium• Heavy
LO 3
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STEPS IN SEGMENTING MARKETS
Select a market
for study
Choosebases
for segmen-
tation
Selectdescriptors
Profileand
analyzesegments
Selecttarget
markets
Design,implement,
maintainmarketing
mix
1 53 42 6
LO 4
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STRATEGIES FOR SELECTING TARGET MARKETS
TargetMarketTargetMarket
A group of people or organizations for which an organization designs, implements, and maintains a marketing mix intended to meet the needs of that group, resulting in mutually satisfying exchanges.
LO 5
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STRATEGIES FOR SELECTING TARGET MARKETS
ConcentratedStrategy
UndifferentiatedStrategy
MultisegmentStrategy
LO 5
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UNDIFFERENTIATED TARGETING STRATEGY
UndifferentiatedTargetingStrategy
UndifferentiatedTargetingStrategy
A marketing approach that views the market as one big market with no individual segments and thus requires a single marketing mix.
LO 5
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UNDIFFERENTIATED TARGETING STRATEGY
UndifferentiatedStrategy
Advantage:
§ Potential savings on production and marketing costs
Disadvantages:
§ Unimaginative product offerings
§ Company more susceptible to competition
LO 5
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CONCENTRATED TARGETING STRATEGY
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ConcentratedTargeting Strategy
ConcentratedTargeting Strategy
A strategy used to select one segment of a market for targeting marketing efforts.
NicheOne segment of a market.
LO 5
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CONCENTRATED TARGETING STRATEGY
ConcentratedStrategy
Advantages:§ Concentration of resources§ Meets narrowly defined
segment§ Small firms can compete§ Strong positioning
Disadvantages:§ Segments too small, or
changing§ Large competitors may
market to niche segment
LO 5
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MULTISEGMENT TARGETING STRATEGY
MultisegmentTargetingStrategy
MultisegmentTargetingStrategy
A strategy that chooses two or more well-defined market segments and develops a distinct marketing mix for each.
LO 5
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MULTISEGMENT TARGETING STRATEGY
MultisegmentStrategy
Advantages:§ Greater financial success§ Economies of scale
Disadvantages:§ High costs§ Cannibalization
LO 5
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COSTS OF MULTISEGMENT TARGETING
u Product design costs
u Production costs
u Promotion costs
u Inventory costs
u Marketing research costs
u Management costs
u Cannibalization
LO 5
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CANNIBALIZATION
CannibalizationCannibalizationSituation that occurs when sales of a new product cut into sales of a firm’s existing products.
LO 5
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REVIEW LEARNING OUTCOMEAlternatives for Selecting Target Markets
Undifferentiated Multisegment Concentrated
LO 5
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ONE-TO-ONE MARKETING
One-to-OneMarketing
One-to-OneMarketing
An individualized marketing method that utilizes customer information to build long-term, personalized, and profitable relationships with each customer.
LO 5
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One-to-One Marketing
Information-IntensiveInformation-Intensive
Long-TermLong-Term
One-to-OneMarketing is...
One-to-OneMarketing is...
IndividualizedIndividualized Cost ReductionCost Reduction
Has a Goal of…Has a Goal of…
Customer LoyaltyCustomer Loyalty
Increased RevenueIncreased Revenue
PersonalizedPersonalized
Customer RetentionCustomer Retention
LO 5
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ONE-TO-ONE MARKETING
1. One-size-fits all marketing no longer effective
2. Direct and personal marketing will grow to meet needs of busy consumers.
3. Consumers will be loyal to companies that have earned—and reinforced—their loyalty.
4. Mass-media approaches will decline as technology allows better customer tracking.
Trends
LO 5
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POSITIONING
PositioningPositioningDeveloping a specific marketing mix to influence potential customers’ overall perception of a brand, product line, or organization in general.
LO 6
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Positioning of Procter & Gamble Detergents
LO 6
Brand Positioning MarketShare
Tide Tough, powerful cleaning 31.1%
Cheer Tough cleaning, color protection 8.2%
Bold Detergent plus fabric softener 2.9%
Gain Sunshine scent and odor-removing formula 2.6%
Era Stain treatment and stain removal 2.2%
Dash Value brand 1.8%
Oxydol Bleach-boosted formula, whitening 1.4%
Solo Detergent and fabric softener in liquid form 1.2%
Dreft Outstanding cleaning for baby clothes, safe 1.0%
Ivory Snow Fabric & skin safety on baby clothes 0.7%
Ariel Tough cleaner, aimed at Hispanic market 0.1%
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EFFECTIVE POSITIONING
1. Assess the positions occupied by competing products
2. Determine the dimensions underlying these positions
3. Choose a market position where marketing efforts will have the greatest impact
LO 6
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PRODUCT DIFFERENTIATION
ProductDifferentiation
ProductDifferentiation
A positioning strategy that some firms use to distinguish their products from those of competitors.
Distinctions can be real or perceived.
LO 6
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PERCEPTUAL MAPPING
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PerceptualMapping
PerceptualMapping A means of displaying or
graphing, in two or more dimensions, the location of products, brands, or groups of products in customers’ minds.
LO 6
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PERCEPTUAL MAPPINGLO 6
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POSITIONING BASES
AttributeAttribute
Price and QualityPrice and Quality
Use or ApplicationUse or Application
Product UserProduct User
Product ClassProduct Class
CompetitorCompetitor
EmotionEmotion
LO 6
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REPOSITIONING
RepositioningRepositioning Changing consumers’ perceptions of a brand in relation to competing brands.
LO 6
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REVIEW LEARNING OUTCOME Positioning and Product Differentiation
LO 6