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MKTG 370 SEGMENTATION, TARGETING, AND POSITIONING Lars Perner, Instructor 1 Segmentation, Targeting, and Positioning Segmentation Product positioning strategy.

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Presentation on theme: "MKTG 370 SEGMENTATION, TARGETING, AND POSITIONING Lars Perner, Instructor 1 Segmentation, Targeting, and Positioning Segmentation Product positioning strategy."— Presentation transcript:

1 MKTG 370 SEGMENTATION, TARGETING, AND POSITIONING Lars Perner, Instructor 1 Segmentation, Targeting, and Positioning Segmentation Product positioning strategy Bases for segmentation Positioning Targeting Repositioning

2 MKTG 370 SEGMENTATION, TARGETING, AND POSITIONING Lars Perner, Instructor 2 Definition Segmentation: Aggregating prospective buyers into groups that (1) have common needs and (2) will respond similarly to a marketing action. Although not all these consumers are completely alike, they share relatively similar needs and wants Marketing action: involves efforts, resources, and decisions--product, distribution, promotion, and price

3 MKTG 370 SEGMENTATION, TARGETING, AND POSITIONING Lars Perner, Instructor 3 Approaches to Marketing Undifferentiated Strategy (no intended difference from competitors; no specific consumer group sought out) Concentrated Strategy (differentiation; one consumer segment sought) Differentiated Strategy (same firm makes different versions for different segments) Auto makers Southwest Airlines

4 MKTG 370 SEGMENTATION, TARGETING, AND POSITIONING Lars Perner, Instructor 4 Segments--Examples (1) Air Travel Business/Executive: Inflexible; relatively price insensitive (Small number of people, but travel often) Leisure Traveler/Student: Relatively flexible; very price sensitive (other methods of travel-- e.g., bus, car, train--are feasible; travel may not be essential) (Very large segment) Comfort Travelers: Comfort (e.g., space, food) important; willing to pay (Small segment)

5 MKTG 370 SEGMENTATION, TARGETING, AND POSITIONING Lars Perner, Instructor 5 Examples (2): Restaurant Diners High Low Price Sensitivity Convenience Low High Taco Bell McDonalds Fancy Restaurants --e.g., Ritz Carlton High-end delivered food Dennys Local, unbranded fast food restaurants E.g., --speed --location

6 MKTG 370 SEGMENTATION, TARGETING, AND POSITIONING Lars Perner, Instructor 6 Notes on Segments Boundaries between product categories are blurred--soft drinks or non-alcoholic beverages? Any number of dimensions possible--but too many variables cut segment size Segments must differ meaningfully from others large enough to be profitable be serviceable (have need that can be met cost effectively)

7 MKTG 370 SEGMENTATION, TARGETING, AND POSITIONING Lars Perner, Instructor 7 Criteria in Selecting Segments Potential for increased profit and ROI Similarity of needs of consumers within Differences of needs of members of different segments Feasibility of serving each specific segments Cost effectiveness of identifying members of each segment

8 MKTG 370 SEGMENTATION, TARGETING, AND POSITIONING Lars Perner, Instructor 8 Bases for Segmentation: Consumer Characteristics Geographic Regional Area characteristics: The PRIZM system Income willingness to spend! Occupation Demographics Gender Age Ethnicity Household size Marital status Single, never married Married Divorced Presence of children

9 MKTG 370 SEGMENTATION, TARGETING, AND POSITIONING Lars Perner, Instructor 9 Bases for Segmentation: Behavior and Buying Situations Benefits sought Behavior Involvement Usage rates and status 80/20 rule20% of consumers may account for 80% of consumption Media preferences Preferred shopping outlets

10 MKTG 370 SEGMENTATION, TARGETING, AND POSITIONING Lars Perner, Instructor 10 Combining variables… Soft drink preferencessome segmentation variables Preferred taste: Cola, lime, no taste, natural juice, ice tea Calorie/taste tradeoff: taste more important, some importance of both, will sacrifice taste for low calories Usage occasion: Multi-pack for home; single can/bottle; fountain drink Price sensitivity/brand loyalty: Willingness to pay more for name brand or specialty soda

11 MKTG 370 SEGMENTATION, TARGETING, AND POSITIONING Lars Perner, Instructor 11 Some combined segments… Price sensitive, non-brand loyal cola- taste, full-flavor segment, multi-pack Price insensitive, cola taste, brand loyal, low calorie, multi-pack Price insensitive, natural juice, taste sensitive, single serving Typical behaviors of these consumers. Circumstances may involve occasional variations.

12 MKTG 370 SEGMENTATION, TARGETING, AND POSITIONING Lars Perner, Instructor 12 Positioning Strategies Head-on competition Airlines (want to differentiate but have difficulty pulling it off in practice) Beef products Differentiation Burger King: Grilled instead of McDonalds fried burgers Halmark: When you care to send the very best… Hertz (vs. Not exactly) Zachy Farms (chicken)

13 MKTG 370 SEGMENTATION, TARGETING, AND POSITIONING Lars Perner, Instructor 13 Targeting: Selecting Segment(s) and Specializing You cant be all things to all people ---> choose one or more groups Focus narrows scope of competition, but demands are greater Repositioning: Changing established position may be difficult - - e.g., Sears McDonald Good sales; poor everyday values Lunch; not dinner Good for children

14 MKTG 370 SEGMENTATION, TARGETING, AND POSITIONING Lars Perner, Instructor 14 Some Repositioning Campaigns Cadillac: Its not your fathers car. Geritol: Not too young for Geritol. Orange juice: It isnt just for breakfast anymore. Chocolate milk for adults NOTE: Repositioning is difficult. It will take a great deal of advertising support. There is no guarantee that consumers will cooperate !

15 MKTG 370 SEGMENTATION, TARGETING, AND POSITIONING Lars Perner, Instructor 15 Some Brands That Were Dropped Rather Than Repositioned ValueJet AirTran Packard Bell e-Machines German Communist Party Party for Democratic Socialism

16 MKTG 370 SEGMENTATION, TARGETING, AND POSITIONING Lars Perner, Instructor 16 Evaluating Target Segments Sales potential Competitive presence/ potential Cost of service Feasibility of service Impact on segments already served

17 MKTG 370 SEGMENTATION, TARGETING, AND POSITIONING Lars Perner, Instructor 17 Euphemisms in Positioning Loss Prevention Associate Sales Counselor Pre-Owned or Previously Loved Vehicle Gaming


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