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Transcript of Slide 10.1 Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1 st Edition © Pearson...
Slide 10.1
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
The Value of Segmentation and Targeting
LECTURE WEEK 5
Slide 10.2
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Lecture questions
1. What are the different levels of market segmentation?
2. How can a company divide a market into segments?
3. How should a company choose the most attractive target markets?
4. What are the requirements for effective segmentation?
Slide 10.3
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Lecture questions (continued)
5. How can a firm create, develop and communicate a successful positioning strategy in the market?
6. Why is the concept of positioning so important to marketing practitioners?
7. How can companies seek to positively differentiate their offerings in today’s market conditions?
8. When might companies need to reposition theirmarket offerings and what are the main inherent risks of such a strategy?
Slide 10.4
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Morgan cars serve a niche market
Morgan Cars: have a long order book and continue to serve a niche market for handbuilt traditional sports cars for baby boomersSource: Steve Sant/Alamy
Slide 10.5
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Effective targeting requires…
• Identify and profile distinct groups of buyers who differ in their needs and preferences.
• Select one or more market segments to enter.
• Establish and communicate the distinctive benefits of the market offering.
Slide 10.6
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Four levels of micromarketing
Segments
Local areas Individuals
Niches
Slide 10.7
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
What is a market segment?
A market segment consists of a group of customers who share a similar set of
needs ad wants.
For a discussion of market analysis and market segmentation, view the following video:
www.youtube.com/watch?v=llJNwdV-G88
Slide 10.8
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Flexible marketing offerings
Naked
solution:
Product and service elements that all segment members value.
Discretionary options:
Some segment members value options but not all.
Slide 10.9
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Preference segments
• Homogeneous preferences exist when consumers want the same things.
• Diffused preferences exist when consumers want very different things.
• Clustered preferences reveal natural segments from groups with shared preferences.
Slide 10.10
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
This delicatessen focuses on local marketing
A Polish food shop opens to provide a taste of home for the large local Polish community in Darlington in the north of EnglandSource: Gregory Wrona/Alamy
Slide 10.11
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
The long tail
Chris Anderson explains the long tail equation:
• The lower the cost of distribution, the more you can economically offer without having to predict demand.
• The more you can offer, the greater the chance that you will be able to tap latent demand for minority tastes.
• Aggregate enough minority taste, and you may find a new market.
See a video clip featuring Chris Anderson at www.youtube.com/watch?v=0Yku0GTrcuw
Slide 10.12
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
What is customerisation?
Customerisation combines operationally driven mass customisation with customised
marketing in a way that empowers consumers to design the product and
service offering of their choice.
Slide 10.13
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Segmenting consumer markets
GeographicGeographic
DemographicDemographic
PsychographicPsychographic
BehaviouralBehavioural
Slide 10.14
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Claritas’ PRIZM
For a discussion on how to maximise revenue using PRIZM, watch this video clip:
www.youtube.com/watch?v=LtFHyaJvkiw
• Education and affluence
• Family life cycle
• Urbanisation
• Race and ethnicity
• Mobility
Slide 10.15
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Demographic segmentation
Age and life cycleAge and life cycle
Life StageLife Stage
GenderGender
IncomeIncome
GenerationGeneration
Social classSocial class
Slide 10.16
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Mini cooper: generation targeting
Memories for baby boomers and a cool car for 20 year oldsSource: Sandro Campardo/AP/PA Photos
Slide 10.17
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Psychographic segmentation
For a discussion on demographic vs psychographic segmentation view this video:www.youtube.com/watch?v=4A-1qfiz4EQ
Psychographic segmentation divides buyers into different groups on the basis of traits, lifestyles or values.
Slide 10.18
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Forces shaping social change
Table 10.4 The forces shaping social changeSource: L. Hasson (1995) Monitoring social change, International Journal of Market Research, 37(1), 69–80. Copyright © 1995 Market Research Society (www.ijmr.com). Reproduced with permission
Slide 10.19
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
SINUS typology
Table 10.5 SINUS typology
Slide 10.20
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
The VALS system
Figure 10.2 The VALS™ segmentation system: an eight-part typologySource: VALS™. Copyright © SRI Consulting Business Intelligence. Reproduced with permission
Slide 10.21
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Behavioural segmentation: decision roles
Initiator
Influencer
Decider
Buyer
User
Slide 10.22
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Behavioural segmentation: behavioural variables
• Occasions• Benefits• User status• Usage rate• Buyer-readiness• Loyalty status• Attitude
John Kelly makes the case for behavioural segementation in this video clip:
www.youtube.com/watch?v=5gNus1ePAdg
Slide 10.23
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
The brand funnel illustrates variationsin the buyer-readiness stage
• Aware• Ever tried• Recent trial• Occasional user• Regular user• Most often used
Slide 10.24
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Figure 10.3 Brand funnel
Slide 10.25
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Loyalty status
Switchers
Shifting loyals
Split loyals
Hard-core
Slide 10.26
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Attitudes about product purchases
• Enthusiastic
• Positive
• Indifferent
• Negative
• Hostile
Slide 10.27
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Behavioural segmentation breakdown
Figure 10.4 Behavioural segmentation breakdown
Slide 10.28
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
The conversion model
Convertible Shallow Average Entrenched
Strongly
unavailableAmbivalent Available
Weakly
unavailable
Users Nonusers
Slide 10.29
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Segmenting for business markets
DemographicDemographic
Operating variableOperating variable
Purchasing approachesPurchasing approaches
Situational factorsSituational factors
Personalcharacteristics
Personalcharacteristics
Slide 10.30
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Steps in segmentation process
Needs-based segmentation
Segment identification
Segment attractiveness
Segment profitability
Segment positioning
Segment acid test
Marketing-mix
strategy
Slide 10.31
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Effective segmentation criteria
MeasurableMeasurable
SubstantialSubstantial
AccessibleAccessible
DifferentiableDifferentiable
ActionableActionable
Slide 10.32
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Patterns of target market selection
Figure 10.5 Five patterns of target market selectionSource: Adapted from D. F. Abell (1980) Defining the Business: The Starting Point of Strategic Planning, Upper Saddle River, NJ: Prentice Hall, Chapter 8, pp. 192–6.Copyright © 1980. Reproduced with permission from Pearson Education, Inc.
Slide 10.33
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Patterns of target market selection (continued)
Figure 10.5 Five patterns of target market selection (continued)Source: Adapted from D. F. Abell (1980) Defining the Business: The Starting Point of Strategic Planning, Upper Saddle River, NJ: Prentice Hall, Chapter 8, pp. 192–6.Copyright © 1980. Reproduced with permission from Pearson Education, Inc.
Slide 10.34
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Figure 10.5 Five patterns of target market selection (continued)Source: Adapted from D. F. Abell (1980) Defining the Business: The Starting Point of Strategic Planning, Upper Saddle River, NJ: Prentice Hall, Chapter 8, pp. 192–6.Copyright © 1980. Reproduced with permission from Pearson Education, Inc.
Patterns of target market selection (continued)
Slide 10.35
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Figure 10.6 Segment-by-segment invasion plan
Slide 10.36
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
What is positioning?
Positioning is the act of designing the company’s offering and image to occupy
a distinctive place in the mind of the target market.
For an interesting bookmercial for Ries and Trout watch this video: www.youtube.com/watch?v=EE4YAIuccIs
Slide 10.37
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Examples of Value propositions
Table 10.8 Examples of value propositionsSource : M. R. V. Goodman, Durham University
Slide 10.38
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Defining associations
Points-of-difference (PODs)
Attributes or benefits consumers strongly
associate with a brand, positively evaluate and believe they could not find to the same extent
with a competitive brand.
Points-of-parity
(POPs)
Associations that are not necessarily unique to the brand but may be
shared with other brands.
Slide 10.39
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Establishing category membership
• Announcing category benefits
• Comparing to exemplars
• Relying on the product descriptors
Slide 10.40
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Consumer desirability criteria for PODs
RelevanceRelevance
DistinctivenessDistinctiveness
BelievabilityBelievability
Slide 10.41
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Deliverability criteria for PODs
FeasibilityFeasibility
CommunicabilityCommunicability
SustainabilitySustainability
Slide 10.42
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Negatively correlated attributes and benefits
Table 10.10 Examples of negatively correlated attributes and benefits
Slide 10.43
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Addressing negatively correlated PODs and POPs
• Present separately
• Leverage equity of another entity
• Redefine the relationship
Slide 10.44
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Understanding competitive structure of a market
• How do customers view the brand?
• Which competitive brands do customers perceive to be their closest competitors?
• What market offering and company attributes are most responsible for these perceived differences?
Slide 10.45
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
What is perceptual mapping?
Perceptual(or positioning) mappingis a marketing tool that enables marketers to plot the position of theiroffering against thoseof the competition?
Figure 10.7 Example positioning map of the UK chocolate block sector marketSource : M. R. V. Goodman, Durham University
For advice on how to do a perceptual map go to the following video clip: www.youtube.com/watch?v=wphoXc0qANE
Slide 10.46
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Differentiation strategies
Product
Channel Image
Personnel
Slide 10.47
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Product differentiation
• Product form• Features• Performance• Conformance• Durability• Reliability• Reparability
• Style• Design• Ordering ease• Delivery• Installation• Customer training• Customer consulting• Maintenance
Slide 10.48
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Recap: can you explain?
• How can a company divide a market into segments?
• How should a company choose the most attractive target markets?
• What are the requirements for effective segmentation?
Slide 10.49
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Recap: can you explain? (continued)
• How can a firm create, develop and communicate a successful positioning strategy?
• How can companies seek to positively differentiate their offerings in today’s market conditions?
• When might companies need to reposition their market offerings and what are the main inherent risks of such a strategy?