1. 26.08.00IN-DBL20001 Market Segmenting and Communication INF5290 L.Monrad-Krohn

2. 26.08.00IN-DBL20002 Market Segmenting Why marked segmenting? –Product Development, –Sales and Marketing –Price determination Fundamental market segmenting: –Consumer –Business –Geographical area

3. 26.08.00IN-DBL20003 Market Segmenting2 Consumer segmenting: –Sex –Age –Income –Education –Family situation –Hobby and interests –Occupation –Geographic location –Cultural background –Immediate situation Business segmenting: –Industry type –Fixed asset vs raw material vs consumables –Product quality and price: High. Medium and Low –Business Scale: Fortune500, Medium and Small, Start-Up

4. 26.08.00IN-DBL20004 Market Segmenting3 Task of segmenting market is the key to efficient Sales work (And product development) –Sharper segment lead to easier sales work Ultimate segment: Single person How to define a group with common traits making them likely to buy the product or service? –Not easy, but most important for success

5. 26.08.00IN-DBL20005 Market Segmenting4 Try defining market segments for –jewellery –small footprint browser –system for Word-template making with parameters Segment attributes may also be defined (in reverse) from the nature of the sales organization used.(Home party, multilevel marketing, door selling, government agency) –Market segment is characterized by its attributes

6. 26.08.00IN-DBL20006 How to reach the market segment? When the attributes of the marked segment are defined, the product price range must be considered to select the communication channels to the market, i.e. Are we selling an Oil Company Office Workflow system at NOK 30 000k, or a personal hard disk search engine at NOK 300 ?

7. 26.08.00IN-DBL20007 Market Segmenting5 –The product, service or brokerdeals must solve some problem or fill a need with the potential customer. (FRUST) –In a simple way the segment could be defined by this problem or need,(FRUST) but this gives us no handle to create the communication channels for our promise –Question is: How to limit our communication to the segment. (In order to save money)?

8. 26.08.00IN-DBL20008 Market communication –To inform people (decision makers) about our promise costs money which has to be retrieved from the price paid by the customer –Lower cost for market communication-> lower customer price->more sales->more profit->higher growth Better defined market segment-> lower cost market communication->higher growth

9. 26.08.00IN-DBL20009 Market communication 2 Market(segment) communication channels: Advertisements in –Newspapers, Periodicals, Radio, TV, Internet-sites, Poster sites, Public transportation sites etc etc Direct mail campaigns through: –Snailmail, Willing internet mail receipients Personal direct sales: –By appointment, Door to door Magazine (TV or Newspaper etc) editorials and product news Word of mouth

10. 26.08.00IN-DBL200010 Types of market communications Image building: It is difficult to sell a product to someone that has not heard of the company, nor the product Aim to build company awareness, reputation, or change a reputation Product selling Track response to find out which channels are profitable Never an ad without a coupon

11. 26.08.00IN-DBL200011 Market communication and perceived value of product Some times market segment messages should be audited and remade. (The promise) It may not be obvious for us what values the customers attach to the product and company (after initial sales and some passing of time) Means to find out: Questionaires Closed Customer Conferences

12. 26.08.00IN-DBL200012 Market communication channels and product distribution channels –Market communication channels and product distribution channels are generally not the same Product channels must be trained and informed about Market Strategy and Messages, and motivated on a regular weekly, monthly or quarterly basis Product channels create push for product Market communication create pull For market communication it should be assumed that product channels are passive (And vica versa)

13. 26.08.00IN-DBL200013 Market channels and Internet It is generally understood that B2B and B2C sales will expand greatly these days, and create a collapse of the (up till now) usual product distribution channels –Goods are ordered over the Net and delivered by Snailmail, UPS, etc (logistics being the weaker link) –Orders received by e-mail or integrated with sellers ERP (or CRM)

14. 26.08.00IN-DBL200014 Market channels and Internet-2 Customer personal profiles may be generated acording to recorded browse pattern to create instant classification and communication adaption (Except in Norway) The old distributor to reseller chain with the corresponding margins is replaced (collapsed) –by Site Link Agent commission payment, (possibly in several steps), when customer is buying at the final site which has been reached trough other links, which will be sharing in the profit of the sale made.

15. 26.08.00IN-DBL200015 Market channels and Internet 2 Challenges for selling over the Net are to : –1 Integrate Orders received by the Net with the rest of the companys logistics, accounting and billing system,(EPR-system, Back office system) –2 Integrate Customer communication over the Net with customer communication over telephone and mail (with human beings possibly using a separate CRM- system) –3 Differenciate Site according to market segment