The Marketing Process

Chapter Two & Seven

Target Consumers

Product

Place Price

Promotion

Competitors

Marketing Intermediaries

Publics Suppliers

Demographic- Economic

Environment

Technological- Natural

Environment

Political- Legal

Environment

Social- Cultural

Environment

The Marketing Process

How do Companies identify their Target

Consumer?

S-T-P Market Segmentation

1. Identify bases for segmenting the market 2. Develop segment profiles

Market Targeting 3. Develop measure of segment attractiveness 4. Select target segments

Market positioning 5. Develop positioning for target segments 6. Develop a marketing mix for each segment

•  Market Segmentation: determining distinct groups of buyers (segments) with different needs, characteristics, or behavior.

Companies divide large, heterogeneous markets

into smaller segments that can be reached more

efficiently and effectively with products and services that match their unique

needs.

How can you segment the market?

Sheet

Density or Climate

City or Metro Size

World Region or Country

Geographic Segmentation

Demographic Segmentation

•  Dividing the market into groups based on variables such as: –  Age –  Gender –  Family size or life cycle –  Income –  Occupation –  Education –  Religion –  Race –  Generation –  Nationality

Psychographic Segmentation

Divides Buyers Into Different Groups Based on:

Behavioral Segmentation

•  Dividing the market into groups based on variables such as: – Occasions – Benefits – User status – Usage rate – Loyalty status – Readiness stage – Attitude toward product

•  Size, purchasing power, profiles  of segments can be measured.

•  Segments can be effectively  reached and served.

•  Segments are large or profitable enough to serve.

Measurable

Accessible

Substantial

Differential

Actionable

•  Segments must respond differently to different marketing mix elements & programs.

•  Effective programs can be designed to attract and serve the segments.

Step 1. Market Segmentation Requirements for Effective Segmentation

How Do you think the following organizations segment the market?

1.  Pepsi Co. 2.  Lipton 3.  Hyundai 4.  Bibliotheca Alexandrina 5.  Renaissance Movie Theater

Discussion Connections

•  Can you identify specific companies, other than the examples already discussed, that practice each level of segmentation?

•  Using the segmentation bases, segment the footwear market.

•  Describe each of the major segments and sub segments.

Market Targeting Evaluating each segment’s attractiveness

and selecting one or more segments to enter.

Target Market – a set of buyers sharing common needs or characteristics that the company decides to serve

Evaluating Market Segments •  Segment Size and Growth

– Analyze current sales, growth rates and expected profitability for various segments.

•  Segment Structural Attractiveness – Consider effects of: competitors, availability of

substitute products and, the power of buyers & suppliers.

•  Company Objectives and Resources – Company skills & resources needed to succeed in

that segment(s). – Look for Competitive Advantages.

Discussion Connection

•  At the last Discussion Connection, you segmented the U.S. footwear market. –  Now, pick two companies that serve this market and

describe their segmentation and targeting strategies. –  Can you come up with one that targets many different

segments versus another that focuses on only one or a few segments?

•  How does each company you choose differentiate its marketing offer and image?

•  How has each done a good job of establishing this differentiation in the minds of targeted consumers?

Market Positioning Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target

consumers. EXAMPLE: Chevy Blazer is “like a rock.”

Choosing a Positioning Strategy

Step 1. Identifying Possible Competitive

Advantages

Step 2. Selecting the Right Competitive

Advantage

Step 3. Communicating and Delivering the Chosen Position

Identifying Possible Competitive Advantages

•  Key to winning and keeping customers is to understand their needs and buying processes better than competitors do and deliver more value.

•  Competitive advantage is an advantage over competitors gained by offering consumers greater value, either through lower prices or by providing more benefits, that justify competitive advantage,

Communicating and Delivering the Chosen Position

•  Once position is chosen, company must take strong steps to deliver and communicate the desired position to target consumers.

•  All the company’s marketing mix must support the positioning strategy.

•  Positioning strategy must be monitored and adapted over time to match changes in consumer needs and competitor’s strategies.